Updated: Apr 30, 2021
The current insurance sales ecosystem has been experiencing a paradigm shift over the last few years as we see sales shift from relationship driven agents sales to direct-to-consumer digital sales.
With rapidly evolving mobile technology, insurance customers have started to find the ease of use and rapid quotes of digital insurance platforms to be a preferable way to buy insurance.
The 2017 Global Distribution and Marketing Consumer Study reveals that nearly 51% of digitally active groups of consumers (39% of all Insurance consumers) have purchased insurance through an online channel.
According to an Accenture study, 42% of “nomad” customers, that is, customers shifting to online only, are very willing to use computer-generated advice for buying insurance, seeing it as faster and more convenient.
Distributing Insurance through Affinity-based Digital Insurance
The affinity model focuses on distributing products to a group of tightly-connected people with similar interests. Historically, banks have been relevant affinity partners of insurers, so much so that there’s a word for selling insurance through a Bank: Bancassurance. Bancassurance is a growing global market, expected to grow at a rate of more than 6.1% from 2019-2024.
However, with the advent of technology and the change in consumer behavior, insurers now have at their disposal more capabilities than ever before to extend their products and services to the mobile channel. A new generation of consumers who care about self-managing everything that matters to them (including Insurance) on mobile is on the rise, so making insurance accessible and available everywhere is a must for insurers.
And that’s where Habit comes to play. With our digital affinity insurance technology, while the model remains the same, the access now becomes… well, digital.
At Habit, we believe brands have the biggest argument ever to sell any product, including insurance and that is: Trust. Trust is a top buying consideration and can be a deciding factor. The unprecedented power that brands have over customers is what, in our opinion, will convert an insurance sale better than any other channel.
Say someone is really enjoying playing tennis and gets a $200 racquet? Wouldn’t it make sense to insure it and make sure one gets reimbursed if it gets lost, stolen or heavily damaged? What if this protection add-on could be made on the player's favorite sports app?
The Habit technology is changing the way insurance is sold and how quickly insurance products get to market. Using a lightweight program to extend the functionality of apps to sell insurance, commonly known as API, brands can plug it with low effort on coding and insurers can see their policies being sold within weeks. Affinity-based insurance is an effective way for brands to monetize their mobile app without becoming too intrusive, as well as add peace of mind to the experience of their users. At the same time, insurers can be rest assured that their products will be placed in front of the right people, at the right time.
Sports Insurance and the Affinity Opportunity
The health and fitness industry growth is too obvious to ignore.
By default, exercising is a social experience. Even fitness lovers who aren’t into classes know they are a part of a community and enjoy using digital channels to share their experience, review their daily activity or simply to get workout inspiration. The same goes for sports players who, by convenience, resort to digital channels to book a tennis court or to engage with people who love the things they love.
With an increasing amount of sports, activities and facilities being available to the public, appropriate insurance is critical in order to protect people as they are permanently exposed to risk when exercising.
Although fitness and sports can take all sorts of formats - from biking around the block to playing professional tennis or basketball - there is always a risk of injury involved with any physical activity. The risk increases when doing sports and leisure activities that require the use of expensive equipment, which people often own, rather than hire. Even at an amateur level, a considerable amount of people get expensive gear or equipment to be at their top level when playing sports, which can become a source of money loss if it’s damaged, stolen or lost.
Commonly, insurance policies sports and activities lovers can enjoy are Personal Accident Insurance, which is usually covered by the facility they use; Equipment Insurance, to cover expensive gear or equipment, which is not covered by standard sports insurance policies, and Travel Insurance, for when people exercise or play sports away from home.
Depending on the insurance regulation of each country, and the laws that regulate sports facilities, personal trainers, etc, the risk people expose themselves to is, sometimes, quite shocking. More often than not, people only realise how physically and emotionally draining an injury or equipment loss can be after they have gone through it.
Our goal is to fill in the gap of protection in the sports and fitness industry and expose people to the right coverage for them where they spend time the most - their phones.
Bringing Peace of Mind to Fitness and Sports Lovers on Digital Channels
According to Flurry, “health & fitness apps show the highest retention rates across all categories” and “over 75% of active users open their health & fitness app at least two times a week”. This presents an irrefutable opportunity for brands to capitalize on their users’ frequent engagement and for insurers to leverage these digital channels to sell more policies.
Fitness trackers, which often come with an app, are also a great opportunity to sell insurance. Gartner forecasted that the spending on the wearable device market will increase by 27% to $63 billion in 2021.
If there were any doubts as to the opportunity of selling insurance through fitness apps, with the current Covid-19 pandemic, 82% of Americans working from home are exercising the same or more while working from home, according to Chubb. And guess what they are using A LOT? Fitness trackers. More precisely, 1 in 5 Americans say they currently use a wearable fitness tracker.
In a nutshell, this means people will continue doing sports and exercising even during the toughest circumstances.
As for Sports players, they are increasingly resorting to mobile apps to find communities of fellow players, with similar interests. Examples include social spaces to connect with sports lovers, apps that make it easy to find and book courts, and others to find a sports buddy.
AirCourts is a leading court-booking app for padel, tennis and football. Players can find and book courts all over the country with no paperwork involved.
Crushing the ‘One Size Fits All’ Approach
Insurance needs differ from the type of activities people do and the type of person they are. At Habit, we work with brands to understand their users and design the best, most customized insurance product or add-on with our insurance partners.
Are you a brand with a digital channel looking for new revenue streams and better engagement rates? As a (re)insurer, do you feel the urge to innovate and leverage digital channels to reach more customers? Talk to us about our affinity insurance API now!