Property Players Demand Convenience While Poor Customer Outcomes Spur a Shift Toward Embedded Insurance at the Cost of Traditional Models

New research shows that due to convenience, customers worldwide intend to switch to embedded insurance sources in the future (+36%) at the cost of traditional models (-14%). However, despite their desire for embedded protection offerings, 67% of homeowners, landlords and renters were not offered insurance during their application process. 

This is according to a new consumer-focused study, conducted by Momentive ai and commissioned by Cover Genius, which surveyed more than 15,000 homeowners, landlords and renters worldwide to examine interest in a new model of insurance distribution where realtors, banks, lenders, mortgage brokers, short-term rental listing providers and other proptechs offer insurance during the application process for buying or renting their property. 

The study also found short-term rental hosts want around-the-clock landlord insurance from their listing provider, not just the overlapping coverage they currently provide during the rental period. A whopping 98% of those surveyed would instead be interested in purchasing landlord insurance from their rental listing provider, with convenience as the key motivator. The standard protection included with the majority of rentals on listing sites often overlaps with a host’s own policy, meaning they’re overpaying for their insurance. Embedded landlord insurance overcomes this issue, especially in countries where landlord insurance is not mandated and underinsurance occurs. An on-demand offering that streamlines host protection and landlord insurance has the potential to eliminate overlap and help hosts save money on either their policy or listing fees. Data showed that 32% of hosts favor paying less to their short-term rental listing site while 35% favor paying less for  Landlord or Homeowner Insurance.

“Customers are demanding a better end-to-end experience when renting and buying properties,” said Angus McDonald, CEO and co-founder of Cover Genius. “By leveraging embedded insurance, digital companies can streamline the historically fragmented property insurance processes with digitized protection for the entire home lifecycle, from building to owning to renting. This new research displays a massive opportunity for digital companies – whether you’re a short-term rental provider, bank, lender or proptech – to deliver a tech-led solution their customers are asking for.”

The findings also revealed claims experiences across property insurance are poor, driving customers to seek protection from other sources. When asked to rate their claims experience, homeowners, renters and landlords scored an average post-claims Net Promoter Score (NPS) of -3. Those who recently made a claim were willing to switch providers at a rate 16% higher than those who have not recently made a claim. As the insurtech for embedded insurance, Cover Genius offers a  seamless claims process with an industry-high post-claims NPS.

This follows three groundbreaking reports that found customers worldwide desire other types of embedded protection for its convenience, with the shift in preferences coming at the cost of traditional insurance sources, and in favor of airlines and travel agents, banks (for whom a majority of customers favor receiving offers based on transaction monitoring) and retailers. 

Download the full global report, “The Embedded Insurance Property Report” for more information and a breakdown of findings from 16 countries, including the United States, Canada, Argentina, Brazil, Mexico, the United Kingdom, Italy, France, Germany, Singapore, Vietnam, Australia, India, South Korea, Thailand and Indonesia.