MEXICO CITY, June 7 (Bernama-BUSINESS WIRE) -- With the use of embedded insurance gaining greater global traction, AM Best notes that the role of regulation in protecting policyholders is critical and serves to encourage further acceptance of this distribution concept.
Embedded insurance coverage is developed by a carrier, but is distributed through non-insurance channels. It also is available across multiple markets, although it lacks common characteristics in terms of transparency, regulation and overall success. It often complements another product or service offered and has a limited insured amount.In a new Best’s Commentary, titled, “Embedded Insurance Gradually Gaining a Foothold,” AM Best notes that in the United States, embedded insurance is starting to gain interest across the whole distribution chain and companies are working on facilitating its implementation. E-commerce and insurtech have given rise to specialty insurers that use embedded insurance as their main distribution channel. Across Latin America, leading online retailers offer extended guarantees on a range of electronic devices. Using blockchain, companies—mostly in Europe—are developing insurance solutions that can be embedded in noninsurance products. Additionally, embedded insurance is similar to microinsurance in that it can foster financial inclusion and enhance insurance culture in less-educated or low-income segments of the population by normalizing and promoting insurance coverages in goods that most view as essential.
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