Simpler Commercial Products Aid Digital Experience, Channel Growth


Digital embedded insurance propositions are expected to be more of micro-insurance products with high volumes and low premiums. That necessitates cost of sale to be low and transactions to be automated. Examples are flight delay cover embedded into flight costs, purchase of a bag of seeds with inclusion of crop failure cover due to drought. Due to the simplified nature of such products, typical forms for prospects are obviated and underwriters must rely on platform data to determine risk and set pricing.

Time to market remains slow for insurance product development, owing to regulatory needs, legacy infrastructure, organizational silos, and corporate culture. The challenges are bound to compound as digitalization accelerates and consumer expectations grow. Though businesses keenly understand the impact from such challenges, actual transformation remains sluggish, despite the focus on modernizing product and service development.

Impact On Small Business Insurance

Nearly 40% of small businesses are not insured, and of those insured, 75% are under-insured. Consequently, many small businesses have insufficient coverage in key areas, leaving them vulnerable. Furthermore, the traditional process of obtaining business insurance is cumbersome. Agencies require small business owners to fill out multiple forms and purchase can take weeks to complete.

This onerous application process is undergoing a facelift. Insurers are creating more seamless, customer-driven experiences that incorporate tailored options and services. For small business insurers, external dynamics as well as internal company ambitions are driving product development change.


Most consumers want products that can be activated or deactivated, as needed, in real time.  A broad range of evolving exposures have cropped up, such as cyber risk and a burgeoning cannabis industry. The changing landscape is creating gaps in coverage which are generating opportunities in product development.

To shift from a product-focused mentality to a customer experience–driven business model, carriers have the onus of restructuring cumbersome processes, simplifying products and increasing flexibility of coverages. Insurers need to minimize friction in the value chain, aligning with external business partners, such as data vendors and service providers.

QuickBooks’ Insurance is an example of an embedded product that makes it convenient for a small business to become insured online. Accessible via the Insurance tab from within QuickBooks, it offers general liability, professional liability, employment practices liability, workers’ compensation, commercial auto, cyber and earthquake insurance through highly-rated providers: AP Intego, Coterie and Cover Genius. AP Intego has provided more than 200,000 policies to QuickBooks users to protect their businesses, employees and cashflow with its Pay-As-You-Go workers’ compensation product.

AP Intego was acquired by Next Insurance, whose business models are based on charging monthly premiums to consumers and offers small business owners technology-enabled insurance. A variety of coverages are provided, such as commercial and liability insurance. Pricing starts at just $10 a month per policy. Owners can get immediate monthly quotes for products such as:

  • General Contractors – general liability premiums from $62.50
  • Carpenters, Handymen, and Pressure Washers – general liability from $29
  • Roofers – general liability insurance from $69
  • Personal Trainers – insurance coverage from $11
  • Landscapers – general liability from $29
  • Staffing for Childcare – starting at $33
  • Arborists — from $29 for bodily injury and medical costs cover.
  • Painters and Electricians – general liability insurance from $29

Distributors seeking to build online experiences can access catalogs of commercial carrier product APIs. One such, the Harold Insurance API index includes carriers who are innovators in their field. This post’s cover image is based on Harold’s repository.

The consumer-facing brand will lose relevance, as consumers take to purchase embedded insurance products as part of their digital purchase journeys. Products of the future are likely to be characterized by squads monitoring the product on dashboards fed by real-time data feeds and able to make corrective adjustments. Simplified product designs and insurer’s ability to handle claims seamlessly will help stand out.

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