Embedded insurance – what does the future hold? | Insurance Business America
The premise behind Trellis reflects a big bet that embedded insurance will become a dominant form of distribution in the years ahead. Its technology helps consumers shop for car insurance policies with side-by-side comparisons, and the insurtech start-up forms partnerships with companies that want insurance as part of their broader selection of financial offerings.
CEO and founder Daniel Demetri (pictured) said embedded insurance will become ubiquitous because of its cost and efficiency.
“Embedded insurance is going to be the largest distribution channel in 10 years,” he said. “It’s hard for me to imagine the status quo [remaining] where embedded distribution is sub 2% or sub 5% of the market, and most people are buying their insurance from a local agent or responding to a billboard, or something like that. Those channels of distribution are very expensive for insurers.”
Trellis debuted in 2019 and is based in Salem, NH. It has approximately 70 full-time equivalent employees on staff (a mix of full-time and part-time employees). The company has raised $17 million to date, including an investment from Amex Ventures announced in mid-May.
Trellis centers around its Savvy digital recommendation API platform, which allows consumers to instantly compare and purchase car insurance within a partner’s app or website. Consumers, using their insurance login, can compare their existing policy to possible alternatives, side-by-side. They can also use the site to purchase a different plan and cancel the old one.
Consumers might end up using the platform embedded in a bank application or through a car dealer, Demetri said.
“It’s about integration into the places where the consumer already is, so they don’t have to come to us directly,” he explained.
The company’s partner rate has grown substantially over the past year and Trellis said the number now includes four of the five top digital-only banks, and seven of the top 50 mobile finance apps, including Truebill and Albert. Trellis has also seen rapid growth of monthly users, with more than nine million having visited the platform so far. The company said it has also securely connected approximately one million user accounts to date and those users have saved about $60 million and counting, according to its Amex Ventures investment announcement.
Trellis’s technology includes APIs, which are crucial for the consumer onboarding process.
“The key technology is the ability to share your existing insurance information with us in one step of just your login,” Demetri said. “That’s technology that we built inhouse and it allows for a very seamless experience due to a complex set of API integrations.”
The second key element is the recommendation algorithm, which Demetri explained relies on machine learning to explore comparative costs.
“We need to balance those costs while still finding you the best quote …. dynamically shopping for you in a way that isn’t just calling quotes from everybody,” Demetri said. “It’s basically predicting who is going to find you the quote … we’ve virtualized and automated that by using machine learning.”
The third element, according to Demetri, involves more API integrations that take in APIs from insurers willing to have their products sold in embedded platforms such as the Trellis platform. These allow for smooth, direct comparisons so customers don’t have to check with one insurer at a time.
Integrations, simple or complex
A Trellis integration can vary widely in terms of time investment, Demetri noted.
“What we learned is we often have to crawl, walk or run with our clients and our partners,” he said.
The simplest option for a partner/client is to place a link in their website or app that ties into a landing page or website Trellis would host. Total integration takes more time, where Trellis, in part, will give the client all of its APIs so they can push to Trellis their consumer data.
“Integrating our APIs, pushing … first party data, which is the data your bank already has about you into the system is really step one,” Demetri said.
Step two involves pulling out the quotes.
“Our recommendation engine might say you should switch your coverage or switch to this insurer or you should consider this action, and then they have to display those insights and those recommendations to the consumer” – a process that must be codified and set up, Demetri said.
Step three considers the notion that consumers pursue an insurance switch and take action to make it happen.
“We actually give our partners the ability to let the consumer switch in their environment,” Demetri said. “If partners want to, they can use our APIs, too, and give us credit card information for example, so we can set up auto pay for the new policy.”
If customers choose just to link to a custom website built by Trellis, the process can take an hour. If it is the more complex version, onboarding and the multiple phases can take two to three months. There is a version somewhere in between that can take three to four weeks, Demetri said.