Insurers pan threat from embedded, top forecasts ‘very overstated’

Embedded insurance is no bogey man set to disrupt the industry and its established players, an informal survey of top-level insurance industry execs by AM Best has indicated.

Some 70% of executives surveyed call the risk overstated, including nearly 30% saying “very overstated,” the survey said of reactions to a forecast for $2.5 trillion in global premium by 2032. This comes from a survey group in which fewer than 30% are selling or planning embedded products.

The percentage of top-level execs calling embedded insurance a “significant threat” to their business model is mid-single-digit and the percentage considering it a threat at all barely crosses the 20% mark.

Most commonly, the product-tied distribution channel is considered a “minor opportunity.”

That lukewarm enthusiasm could result from potential regulatory constraints in a consumer-facing channel, the difficulties of achieving standardized and limited coverages and the ability to keep claims costs and handling at reasonable levels, authors claimed.

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