Wolfe: Swiss Re eyes “rich” opportunity for embedded personal lines insurance

Swiss Re is continuing to see promising opportunities to partner with non-insurance businesses on embedded insurance offerings to access their broad distribution and large customer bases, especially in personal lines, according to the reinsurer’s president of P&C US Keith Wolfe.

Speaking to this publication, the executive said Swiss Re’s Solutions team has been investing heavily in the space.

“The most promising area is ecosystem – or embedded insurance,” said Wolfe.

“We’ve started to get good conversations going with some very large operators that are not insurance sellers but have large consumer bases where insurance is a very natural complementary product to their core offering,” he added.

Wolfe pointed to the more frequent touch points that these companies have with their customers than would normally be seen in the insurance industry, with a “much richer relationship” that could be rounded out by the insurance offering rather than being centred on it.

“Where we get most excited is where those organisations are willing to start a captive of their own and are willing to take some of the risk along the way,” he added.

Examples of partnerships involving the Solutions unit include the tie-up with Nationwide last year to launch digital-only auto product Spire in Texas utilising Swiss Re’s Motor Market Analyzer tool, and the collaboration with insurtech Cover Genius and financial software platform Intuit to offer a parametric quake solution called Shake Shield.

The latter had been an important test case to prove that the model worked, said Wolfe.

Personal lines opportunity

But he said he sees a “much richer opportunity” in the personal lines space.

Swiss Re shared the stage with home security operator Vivint at InsureTech Connect in Las Vegas earlier this month.

And although the two companies are not currently in partnership, Wolfe said that such entities that have large client bases – in the case of Vivint amounting to nearly two million customers – and an interest in the insurance space represent a good fit for embedded insurance.

“They have a rich understanding of what their role is and what they can bring to the table. We believe that a partnership makes more sense than them trying to figure it out on their own,” he commented.

Wolfe said that embedded insurance partnerships in personal lines could also present opportunities to grow the addressable marketplace as well as tap broader distribution.

Examples would include co-launching flood coverage with homeowners products.

Meanwhile the partnerships strategy – including with insurtechs – can also address emerging demand for insurance products from sources such as the growing gig economy.

Wolfe said that the partnerships strategy through Swiss Re Solutions is an opportunity to evolve the insurance product to better meet the needs of customers.

He acknowledged that embedded insurance opportunities are not short-term plays and require significant investment of time to come to fruition.

“I don’t see them as moon shots … We should all be focused on what makes the end buyer’s life better and their experience of our industry better.

“An ecosystem that has great brand recognition and that interfaces with customers on a much more frequent basis than insurance companies do today can create a winning insurance offering with the right partners,” he concluded.