Beyond Bundles: How Packaged Insurance and AI are Speeding Up the Pace of Progress

Imagine a world where insurance consumers in EMEA and APAC can seamlessly combine the purchase of home insurance, auto coverage, liability and natural disasters under one convenient plan. Picture the peace of mind of a small business owner who seamlessly secures a ‘business protection’ package that bundles property, liability, cyber and business interruption coverage, ensuring stability when disasters strike.  

Packaged insurance is transforming the insurance landscape, delivering convenience, cost-effectiveness, and comprehensive protection to consumers and businesses alike. By combining multiple types of coverage into single, streamlined products, insurers are simplifying the buying process, enabling cross-selling and upselling opportunities, and harnessing advanced technologies like AI to create an improved customer experience. 

Regional Relevance 

The impact of packaged insurance is particularly important for the APAC market. Especially in natural-disaster prone regions, like Vietnam, Thailand, Hong Kong, and the Philippines, packaged insurance products are emerging as essential insurance management solutions.  The need for simplified insurance options has never been greater, as natural disasters can have a devastating financial impact on both businesses and individuals. 

Additionally, the expanding middle class in these regions is becoming more aware of the need for comprehensive insurance coverage, particularly as digitalisation accelerates. With the rise of digital platforms, consumers in APAC can now easily compare, purchase, and manage their insurance policies online. This is essential in countries like Thailand and the Philippines, where the adoption of mobile technology has skyrocketed, allowing consumers to engage with insurers in new and more accessible ways. For insurers, offering packages provides an opportunity to meet the growing demand while standing out in an increasingly competitive market. 

In the European insurance market, the demand for bundled insurance products is also on the rise, as more consumers seek comprehensive coverage and convenience. According to a report by the European Insurance and Occupational Pensions Authority (EIOPA), advancements in digital platforms and AI support this trend, enabling insurers to provide tailored, efficient insurance management solutions that align with modern consumer needs. 

Benefits for Customers: Convenience and Comprehensive Coverage 

One of the primary benefits of packaged insurance is its simplicity and convenience. Rather than managing multiple separate policies, customers can now have all their insurance needs met under one packaged product. This not only provides peace of mind but also ensures that their policy covers a variety of risks, while mitigating potential gaps in coverage that can occur while managing multiple policies. Also, packaged products provide cost-savings, as bundling different types of coverage is typically less expensive than purchasing each policy individually. 

For commercial customers, packaged insurance is equally beneficial. Combining coverage into a single policy empowers businesses to manage and meet regulatory requirements. Having a single premium payment and a unified renewal process streamlines operations, enabling business owners to focus on growth rather than paperwork. 

Benefits for Insurers: Driving Cross-Selling and Upselling 

Offering packaged insurance products presents a substantial opportunity for insurers to boost revenue. The ability to cross-sell and upsell additional products within a bundled package increases the chances of customers opting for comprehensive coverage. Bundling personal accident insurance with motor or property insurance, for example, enables customers to gain additional protection for a marginal increase in premium costs and gives insurers an easy cross-sell option, making it a win-win situation. 

AI Enhancements in the Buying and Renewal Process 

AI capabilities play a leading role in enhancing insurers’ ability to cross-sell and upsell, offering a more personalised and efficient experience during the buying and renewal processes. By leveraging AI-driven insights, insurers can personalise their offerings based on past purchase behaviour and other data points. For example, during the buying process, an AI system might suggest that “Customers like you also purchased X cover”, or “Businesses like yours typically take $1M liability coverage”, making it easier to upsell and cross-sell relevant products or additional services. This increases the probability that customers will add extra coverage to their policies, driving revenue for the insurer. 

Post-purchase, AI models can calculate a customer’s lifetime value (CLV) to offer personalised discounts or incentives that increase the likelihood of renewal. By analysing purchasing patterns and data, AI can help predict whether a customer is likely to renew their policy and suggest strategies for increasing renewal rates, such as offering a discount or an additional service that fits their needs. 

The Role of AI in Profitability and Product Line Management 

AI also enables insurers to determine the profitability of specific product lines and make data-driven decisions that enhance the overall portfolio. By understanding customer behaviour, claims history, and market trends, insurers can use AI to fine tune their products, ensuring they remain competitive while maximising profitability. Insurers can use AI to forecast which product lines are likely to perform well in the market and tailor their offerings accordingly. 

Looking Ahead: The Future of Packaged Insurance  

As digitalisation continues to transform the insurance industry, packaged insurance products are poised to become even more prevalent. The integration of AI and big data will allow insurers to offer highly personalised packages that cater to individual preferences and risk profiles. As the use of digital ecosystems grows, insurers will be able to collaborate with a wider range of partners, offering more comprehensive and flexible products. 

Insurers that leverage AI and digital platforms to offer tailored, convenient insurance management solutions will not only capture more of the market but also build stronger, more lasting relationships with their customers and drive growth in the years to come. 

Sapiens’ Strategy  

Sapiens empowers insurers with the tools to overcome challenges presented by legacy systems that lack the flexibility to offer packaged products. Sapiens’ solutions enable insurers to quickly roll out new packages by leveraging pre-configured elements from various products. With features like cross-product discounts and pay-in-one-go functionality, Sapiens helps insurers deliver customer-centric packages that boost sales and streamline operations. Additionally, Sapiens integrates AI into the buying and renewal processes, using models that predict buying propensity and CLV to increase profitability.