The Road to Embedded Insurance

Like Thanos, most experts believe that embedded insurance is ‘inevitable’. The interesting questions are when and how we get there. In automobile insurance, we already see the likes of Tesla moving aggressively into the game, with Elon recently claiming insurance might one day represent “30% to 40% of Tesla’s automobile business.” GM and Toyota have also already announced or rolled out insurance offerings.

The argument goes something like this: he who has the best information wins. The insurer who has more precise and timely data can better price, predict, and eventually even prevent risks. In the long run, the company that can best do those things, will have a margin advantage and will deliver superior returns. Tesla packs hundreds of sensors in each car, with Tesla’s Autopilot system alone leveraging eight cameras, 12 ultrasonic sensors, and forward radar to read lane lines and detect nearby cars. Simply put, Tesla both knows the driver better than a traditional insurer (because they sold you the car) and they know how the driver actually drives, since they have access to insane amounts of telemetry data.

Auto insurance, health insurance, and property insurance will eventually deliver significant amounts of embedded insurance. The path to embedded insurance will start with usage based insurance, where the insured pays for the actual risk they pose. Eventually, the entity that owns the insured asset will also deliver low cost, highly accurate sensors – generating a competitive advantage to offering embedded insurance.

At BlueZoo we recognize that breakthroughs in AI and Cloud technologies make usage based insurance and eventually embedded insurance in property / casualty coverage is more likely to happen sooner rather than later. Our innovations and patents covering Wi-Fi sensing, our alignment with cloud and AI technology innovators such as Google, and our partnership with major global insurers are key accelerators to the future. Unlike Thanos, embedded insurance is actually inevitable.

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