OPEN FINANCE: APIs
INFINITE WAYS TO BRIDGE THE GAP Embedding insurance in someone else’s transaction flow can create endless opportunities for large-scale insurers, says Chubb’s Sean Ringsted
The global protection gap is widening. According to one report, it reached US$1.2 trillion in 2019, the chasm between economic and insured losses driven by natural disasters, mortality and health, with Asia and Latin America emerging as the most exposed regions. But that was before the world was plunged into a risk scenario that was off the scale. As lifestyles and employment practices across both the richest and poorest societies in the world changed as a consequence of the COVID-19 pandemic, underinsurance became an issue for us all. Take the number of people forced into gig work, many for
fast-growing platform companies, who have little or nothing to fall back on when laid off due to illness or injury. In Latin America, few have had access to the ultimate protection – life and disability insurance, including unexpected funeral expenses, which have hit many families in the current crisis hard. It was against this background that global insurer Chubb and the world’s biggest neo, Nubank, leveraged API-driven technology to launch a fully digital life insurance offering in Brazil, embedded into the bank’s app last December. Underwritten by Chubb, Nubank Vida was one of the first to use the integration capabilities of Chubb Studio, the global digital product distribution platform rolled-out by the company three months earlier. Described as ‘insurance in a box’, it aims to simplify and streamline distribution of Chubb’s insurance products through partners’ digital channels around the world.
The Nubank Vida initiative enables quotes, bill payment and account management all to be transacted digitally – basic coverage including natural or accidental death, as well as funeral assistance for family members and living benefits covering hospitalisation for accident or disability. “The Nubank partnership is a great opportunity for us,” says Sean Ringsted, chief digital officer and chief risk officer for Chubb Group. “It has 40 million customers in Latin America and we’re offering them life insurance with literally three clicks. We’re taking a product you might think is pretty complicated to buy, involving a lot of paperwork, and putting it there in the app, with three questions.” Such is the power of embedded finance – the ability to provide coverage and protections as a native feature within a product transaction, a user service or as part of someone else’s platform. It has the potential to transform the distribution model and Chubb is an incumbent insurer demonstrating it can be monetised at scale.
Innovation leap: APIs will extend insurance to those with too little or none at all
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TheInsurtechMagazine | Issue 6
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