Poor customer outcomes induce a shift toward embedded insurance

Angus McDonald, Chief Executive Officer and Co-founder of Cover Genius

New research shows that due to convenience, customers worldwide intend to switch to embedded insurance sources in the future (+36%) at the cost of traditional insurers (-14%). However, despite their desire for embedded protection offerings, 67% of homeowners, landlords and renters were not offered insurance during their application process.

This is according to a new consumer-focused study, conducted by Momentive ai and commissioned by Cover Genius, which surveyed more than 15,000 homeowners, landlords and renters worldwide to examine interest in a new model of insurance distribution where realtors, banks, lenders, mortgage brokers, short-term rental listing providers and other proptechs offer insurance during the application process for buying or renting their property.

What were the findings of Cover Genius’ survey?

The study also found short-term rental hosts want around-the-clock landlord insurance from their listing provider, not just the overlapping coverage they currently provide during the rental period. A whopping 98% of those surveyed would instead be interested in purchasing landlord insurance from their rental listing provider, with convenience as the key motivator.

The standard protection included with several rentals often overlaps with a host’s policy, meaning they’re overpaying for insurance. Embedded landlord insurance overcomes this, especially in countries where landlord insurance isn’t mandated and underinsurance occurs.

An on-demand offering that streamlines host protection and landlord insurance has the potential to eliminate overlap and help hosts save money on either their policy or listing fees. Data showed that 32% of hosts surveyed favor paying less to their short-term rental listing site while 35% of respondents favor paying less for Landlord or Homeowner Insurance.

The findings revealed claims experiences across property insurance are poor, driving clients to seek protection from elsewhere. When asked to rate their claims experience, homeowners, renters and landlords scored an average post-claims Net Promoter Score (NPS) of -3.

Those who recently made a claim were willing to switch providers at a rate 16% higher than those who have not recently made a claim. As the insurtech for embedded insurance, Cover Genius offers a seamless claims process with an industry-high post-claims NPS of +65.

This follows three groundbreaking reports that found customers worldwide desire other types of embedded protection for its convenience, with the shift in preferences coming at the cost of traditional insurers, and in favor of airlines and travel agents, banks (for whom a majority of customers favor receiving offers based on transaction monitoring) and retailers.

What do the findings mean for the industry?

“Customers are demanding a better end-to-end experience when renting and buying properties,” said Angus McDonald, Chief Executive Officer and Co-founder of Cover Genius.

“By leveraging embedded insurance, digital companies can streamline the historically fragmented property insurance processes with digitized protection for the entire home lifecycle, from building to owning to renting. This new research displays a massive opportunity for digital companies – whether you’re a short-term rental provider, bank, lender or proptech – to deliver a tech-led solution their customers are asking for,” Angus McDonald further said.

Download the Australian ‘The Embedded Insurance Property Report’. For more information and a breakdown of findings from 16 countries, including the United States, Canada, LatAm, Argentina, Brazil, Mexico, the United Kingdom, Italy, France, Germany, Singapore, Vietnam, Australia, India, South Korea, Thailand and Indonesia contact us for the global report.