The "Digital Wallet Race" Intensifies as Banks and Fintechs Around the World Invest in Insurance: Chubb Survey

Strong consumer demand accelerating adoption of digital insurance offerings globally, with Latin America and Asia leading the pack and North America playing catch-up
Banks and fintechs are bullish on embedded insurance: majority expect offerings to comprise 10% or more of revenue in just three years

NEW YORK, Aug. 16, 2023 /PRNewswire/ -- A new survey from Chubb, the world's largest publicly traded property and casualty insurance company, reveals that a majority (56%) of financial executives involved in insurance decision-making globally expect to generate more than 10% of their revenue from embedded insurance within three years. Today, just one in five firms reports that level of revenue.

Further, an overwhelming 81% 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 Latin America and Asia, with North America – historically a laggard in digital insurance offerings – poised for growth.

"Banks and the Digital Wallet Race - The Embedded Insurance Strategy," a global survey of 2,000 consumers and 200 finance leaders conducted during the second quarter 2023, reveals the rapid adoption and investment by banks and fintechs in embedded insurance to meet blossoming consumer demand. Over half of consumers globally are interested in purchasing more insurance and 46% believe that digital is the obvious way to buy it.

"The race to win a greater share of consumer digital wallets is intensifying – banks and fintechs are advancing 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. "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, 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."

Booming Consumer Demand, Led by Emerging Markets

According to Chubb's survey, consumers are responding to a growing landscape of risk exposure with booming demand for insurance. Overall, 56% of consumers globally believe they are underinsured. These figures are more pronounced in certain markets: Sixty-two percent of consumers in Latin American and 60% in Asia express interest in purchasing more insurance that not only protects their "stuff," but also their lifestyle.

Opportunity for Established Firms

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. Nearly 60% expressed high levels of trust purchasing insurance from established banks, and 58% indicated the same for established insurers. This compares with 45% expressing high levels of trust in insurance purchases with digital-only insurers and 31% with digital-only banks. Fifty-five 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. "Consumers view legacy banks and insurers as the benchmark in this space, and as a result, we have seen our network of digital distribution partners around the world continue to scale. Global consumer demand is massive for embedded insurance, and we believe the next stage of expansion will come in developed regions and from established financial institutions."

"Embedded insurance channels continue to gain momentum in North America as a strategic growth strategy, particularly in the banking sector where financial firms are increasingly gravitating toward insurance as an added value for their customers," said Amy McNeece, Senior Vice President, Digital Consumer Partnerships for Chubb in North America. "The survey confirmed what we've been hearing from our partner companies: Relevant insurance offers embedded as part of their customers' digital transactions – offering the right protection at just the right time – is helping to improve customer loyalty and brand stickiness."

Survey Methodology

The results presented are based on a survey conducted by iResearch Services, a leading global provider of first-party consumer and professional data. The online survey was fielded during the second quarter of 2023 and results are based on completed surveys by 2,000 consumers and 200 financial executives.

Respondents represented all age groups, levels of education, and professional status. Consumers were evenly split among four regions: North America (500), Latin America (500), Asia Pacific (500) and Europe (500).

Financial executives represented established banking organizations (52%) and fintechs (48%). They were also evenly split among four regions: North America (50), Latin America (50), Asia Pacific (50), and Europe (50). The majority of fintechs (84%) had revenues of $10 million to $500 million; the majority of established banking organizations (89%) had AUM (Assets Under Management) of at least $1 billion. All executives are engaged in decision-making about insurance products, such as embedded insurance.

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

About Chubb

Chubb is the world's largest publicly traded property and casualty insurance company. With operations in 54 countries and territories, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. As an underwriting company, we assess, assume and manage risk with insight and discipline. We service and pay our claims fairly and promptly. The company is also defined by its extensive product and service offerings, broad distribution capabilities, exceptional financial strength and local operations globally. Parent company Chubb Limited is listed on the New York Stock Exchange (NYSE: CB) and is a component of the S&P 500 index. Chubb maintains executive offices in Zurich, New York, London, Paris and other locations, and employs approximately 40,000 people worldwide. Additional information can be found at: www.chubb.com.

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