Technology is changing everything, and insurance is no exception, Open and Embedded Insurance Observatory founder and director Yuri Poletto told the audience at InsurTech Connect Asia (ITC Asia) 2025.
For instance, with a single registration on a digital platform, consumers would have access to an “ecosystem of products and services”, said Mr Poletto. This affects insurers, as consumers now would rather go through companies and brands that they trust, rather than to the insurer.
“This is the concept of embedded insurance,” he said, noting that the product is, by definition, the integration of insurance products and services into non-insurance transactions, services and experiences.
But he posited that it was also more than that, as embedded insurance was not just “a little piece of insurance software” bundled together with a bought product. Rather, Mr Poletto said it was also “when you find an insurance proposition within an ecosystem and … within a software”.
“Embedded insurance is able to outclass traditional distribution models in all the key metrics in terms of customer reach,” he said.
Embedded insurance in Asia
Insurtech Asia Association CEO and founder George Kesselman pointed out that Southeast Asia was one of the pioneers when it came to embedded coverage as an e-commerce company had achieved good penetration and “created a lot of interest [among] the other platforms”.
Mr Kesselman noted that there were successful cases of implementation, which has led to “everybody launching different [kinds] of adjacent cases”, such as embedded travel insurance in the case of cancellation.
China, another pioneer, has a more data-driven market, he said.
“Depending on … user profile and other data, the proposition changes and [it] might even be a different product [offered, which] drives a conversion,” he said.
However, conversion rates vary, he also highlighted, saying, “It can be double digit conversion for [an] electronic device with an extended warranty, [and] very low if [there is no] good match,”
On the other hand, he noted a lot more digital innovation happening in India’s embedded space. Mr Kesselman also called the market interesting, saying, “There is a combination of online to offline.”
Additionally, because the Indian market is so large, he believes they are able to experiment in a more sustainable way, as compared to Southeast Asia’s fragmented market that is still in the early stages of personalisation and evolution.
Other uses
“Embedded insurance can save the world,” WTW Australasia head of commercial and affinity Brent Lehmann said.
Citing the Great Barrier Reef in Australia as an example, Mr Lehmann said embedded insurance was being used to save it.
“The Great Barrier Reef is … eroding at a rapid rate. The reason that the Great Barrier Reef is eroding is because it’s being eaten by starfish … purely because nitrogen is entering the water system [and] attracting and attaching itself to the reef itself,” he said, noting the Australian government found that the chemicals used by sugarcane farmers along the riverbanks, which contained too much nitrate, was entering the ocean and attracting and starfish to the reef.
The problem was not an easy one to solve, he said, even though the Australian government developed other chemicals the sugarcane farmers could use, which reduced the amount of nitrate that would enter the ocean.
He said, “The farmers were … worried about [their sugarcane] yield. To make sure they were not going to lose money, we worked with the government [and] looked at the data … available that would guarantee that if a farmer migrated to a new form of chemical to treat their sugar cane farm, it would not deteriorate the yield or the financial return that they were generating.”
Despite that, the farmers were sceptical, so an embedded insurance programme was built on parametric coverage, said Mr Lehmann.
“It guaranteed the yield or financial return to that sugarcane farmer if they migrated towards the use of a new chemical with less nitrate. Every … chemical that was then sold into the farming community automatically includes this parametric insurance that guarantees the financial strength and performance of that sugarcane farm,” he said.
“This programme has been in place for two years now, and there has been a noticeable improvement in the health and well-being of the Great Barrier Reef.”
ITC Asia 2025 is running from 3 to 5 June in Singapore.