How do bank customers feel about embedded insurance offers?

How do bank customers feel about embedded insurance offers? | Insurance Business Canada

How do bank customers feel about embedded insurance offers?

A recent survey of 504 Canadian bank customers, conducted by (the research company of SurveyMonkey), and commissioned by Cover Genius sought to understand how customers of banks, digital banks and other fintech apps would react to embedded insurance offers based on real-time transaction data.

It asked consumers how interested they would be in allowing their bank (with their permission) to monitor their transactions and offer an option for purchasing protection products based on the purchase history inside of their banking app.

The results indicated that 67% of Canadian digital bank customers would be highly interested in receiving embedded insurance offers based on their transaction data, as would 57% of traditional bank customers. “Trust in banks to protect personal data” is the primary driver for their interest, according to 40% of those surveyed.

“The data show unequivocally that consumers are not aligned with government regulation prohibiting banks from offering embedded insurance in real time with financial transactions,” said Michael Fitzgibbon, director of insurance for Cover Genius Canada. “Canadians are indicating that current restrictions on bank-embedded insurance that would sit alongside mortgages and auto loans and the like are outdated in a highly digitized, post-pandemic economy where consumers increasingly appreciate the relevance and timeliness of embedded offers.”

Fitzgibbon, who is based in Toronto, recently joined Cover Genius to further bolster the global insurtech's activity in the Canadian market where he will oversee and manage partnerships, insurer engagement, and customer experience. With over 30 years experience in the insurance space, Fitzgibbon has held key executive leadership roles with regional and global insurance brokers and sees a great growth opportunity in Canada, coupled with disruption in the insurance industry.

It was noted that Cover Genius has seen a “significant increase” in demand for embedded insurance offerings from their network of global partners - a growth that was intensified in the past 15 months due to the shift to conducting everything online. The firm highlighted Canadian companies across a variety of business verticals are eager to embed truly personalized protection at checkout or sign-up or based on transaction feeds.

The survey of Canadian customers also confirmed that there is broad support for bank-embedded offers for property insurance such as renters, homeowners and/or landlords.

The role and nature of traditional insurers as a “second step” in the buying process was also examined in the paper. Digital bankers and younger demographics are more likely to purchase insurance, however, the data also points to a healthy future for banks as insurance distributors: 75% of Canadians who chose a traditional insurer or broker in the last 12 months would prefer bank-embedded offers for next time.

Cover Genius highlighted that while recent experience purchasing insurance is one way to identify early adopters, another is identifying users of popular fintech apps.

“This desire for a frictionless end-to-end experience has enabled Cover Genius to add partners like Intuit, Wayfair, Booking Holdings, eBay, Descartes ShipRush and gig economy and mobility companies”, Fitzgibbon said. “Why limit the choice to traditional insurers when more than half of Canadians want their banks, fintechs and other financial service providers to tailor embedded insurance offerings for their needs?”