The digital wallet race intensifies as banks and FinTechs in Asia and around the world invest in insurance, according to a survey revealed by global insurance firm Chubb on Wednesday.

Chubb said in a statement that that a majority (56 percent) of financial executives involved in insurance decision-making globally expect to generate more than 10 percent of their revenue from embedded insurance within three years.

In Asia, the majority is even greater, with up to 62 percent.

Further, an overwhelming 81 percent say digital insurance embedded in websites and apps is becoming a must-have rather than a nice-to-have offering.

This sets the stage for accelerating adoption of insurance products in financial services platforms.

The trend is most pronounced in emerging markets in Asia and Latin America.

“Over half of consumers globally, and even more in Asia (60 percent), are interested in purchasing more insurance and 43 percent of consumers in Asia believe that digital is the obvious way to buy it,

“The race to win a greater share of consumer digital wallets is intensifying – and banks and fintechs are taking the lead with expanded offerings of insurance products to deepen customer relationships, drive growth and narrow the protection gaps of their customers,” said Sean Ringsted, Chubb’s Chief Digital Business Officer.

According to him, digitized insurance is already widely popular with global consumers, and financial service providers are building trust and loyalty while unlocking new avenues for growth by offering customers simple, relevant and affordable insurance protection options embedded in their digital customer journey.

As highlighted in the report, he said this is a global phenomenon, with companies in Asia and Latin America investing heavily in these digital insurance capabilities.

“Banks and fintechs in North America are in the race too, but not yet at the pace of their counterparts in other regions,” he added.

According to Chubb’s survey, consumers are responding to a growing landscape of risk exposure with booming demand for insurance.

Overall, 56 percent of consumers globally believe they are underinsured.

These figures are more pronounced in certain markets, with 62 percent of consumers in Latin American and 60 percent in Asia expressed interest in purchasing more insurance that not only protects their “stuff,” but also their lifestyle.

It is also noted that established banks and insurers have a unique opportunity to leverage these trends, especially in developed markets, all while structuring the insurance offers in compliance with applicable insurance laws and regulations.

In Asia, 64 percent of consumers expressed high levels of trust purchasing insurance from established banks, and 57 percent indicated the same for established insurers.

This compares with over 40 percent expressing high levels of trust in insurance purchases with digital-only insurers and 31 percent with digital-only banks.

Globally, 55 percent of financial executives agree that established insurers have an edge over digitally native insurtechs because they have consumers’ trust.

“Markets in Asia and Latin America already demonstrate the massive growth opportunity for banks and fintechs with embedded insurance,” said Gabriel Lazaro, Head of Digital,
Chubb Overseas General Insurance.

According to him, consumers view legacy banks and insurers as the benchmark in this space, and as a result, they have seen their network of digital distribution partners around the world continue to scale.

He noted that global consumer demand is massive for embedded insurance, and he believes the next stage of expansion will come in developed regions and from established financial institutions.

Chubb Asia Pacific Digital Head Isabella Carvalho said that consumers’ growing digital-first expectations and partners’ focus on building new, sustainable revenue streams are fueling the adoption of embedded insurance by fintechs and banks in Asia.

“This is likely to continue: the strong interest in added insurance protections revealed in the survey will further propel growth in Asian markets, and help to narrow protection gaps in the region,” she said.

The “Banks and the Digital Wallet War – The Embedded Insurance Strategy” is a global survey of 2,000 consumers and 200 finance leaders conducted during the second quarter of 2023.

The survey reveals the rapid adoption and investment by banks and fintechs in embedded insurance to meet blossoming consumer demand.

The results presented are based on a survey conducted by iResearch Services, a global provider of first-party consumer and professional data.

Respondents represented all age groups, levels of education, and professional status.

Consumers were evenly split among four regions: North America, Latin America, Asia Pacific and Europe.

Financial executives represented established banking organizations (52 percent) and fintechs (48 percent). They were also evenly split among the four regions.

For both consumers and financial executives, the regions included the following countries: North America: United States and Canada; Latin America: Brazil, Mexico, and Chile; Asia Pacific: South Korea, Singapore, Thailand, The Philippines, and Vietnam; Europe: United Kingdom, France, and Spain.

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