What’s the difference between embedded insurance and a warranty? Is there overlap between these kinds of products?
Over the past number of decades, it has become quite commonplace – almost standard – for the purchase of many everyday items to be accompanied by a warranty. The interplay between this traditional service and the latest technological developments makes for fascinating study and offers meaningful insight.
Although warranties are one of the oldest types of embedded insurance, they are currently undergoing an eye-catching evolution. Warranties work by protecting a purchase, for example white goods, appliances, gadgets or even cars, from breakdown or faults. This works by providing a replacement or repair within a specified timeframe.
Warranties are usually provided by the manufacturer, nevertheless insurers offer ‘extended’ warranties that provide cover beyond the manufacturer’s warranty, often including additional services.
With these new types of embedded warranty products, customers are being offered insurance products they can understand and relate to, providing instant protection for their purchases. This also means retailers get to delight and care for their customers with an attractive, service-enhanced insurance offering providing additional business revenue.
As technology continues to evolve, so too will new insurance products and new ways of creating and offering them. Embedded insurance is just the most recent obvious example.