Since 2018, bsurance has quickly grown into one of the leading players in the InsurTech market, witnessing a swift rise of embedded insurance, in 2021 becoming a buzzword. The hastened consumption of digital services accelerated the growth of embedded insurance, enabling seamless customer experiences around the globe.
The embedded insurance is emerging from pure risk transfer to service-led solutions, ecosystems, including risk prevention and ancillary services. Intriguingly, the premiums and customer purchase journeys are mentioned as the primary advantages embedded insurance offers, leaving embedded claims behind. This article will guide the reader through the embedded claims process, introducing challenges, opportunities, and factors to keep in mind in each step of the insurance claims process.
A walk-through embedded claims process
First Notice of loss
As a famous saying goes, “the first impression lasts,” in the world of embedded claims, the very first touchpoint and impression for a customer is the first notice of loss.
In many business cases, while the purchase journey is flawlessly designed and implemented in insurance solutions, the claims process is separated in the customer’s journey, becoming an annoying hassle for the end-users. To overcome limitations, connectivity is the solution for the problem – embedding all product functionalities to the same application, platform, or website.
In the claims handling process, stick to fundamentals. In case of liability, only insurance holders, nominated representatives, and claimants are eligible to submit the claim. To make the claims handling process smooth and frictionless for the end-users, authorization should be assured in the claims submitting and processing stages.

Apart from the challenges mentioned above, cross-border transfer of personal data is an additional challenge all involved parties must cope with. In the CJEU Schrems II case, the Court ruled out implications for commercial data transfers, restricting EU-based businesses to transfer data to the US-based Privacy Shield framework.
To enable impeccable embedded claims processing within customers journey, the following factors should be evaluated:
- To calculate the claim’s potential value, what categories of data must be collected from a third-party administrator or claims handler? Keep in mind that knowing the dependencies is an essential part of the claim payment calculation process.
- The dedicated landing page for the claims handling process also serves the role of the data collection channel, helping tech-driven companies collect and control a vast amount of data on risk, gaining valuable insights and competitive advantage over other providers in the market.
- Last but not least, when it comes to personal data processing and collecting in the claims process, strict data protection regulations will apply and go under any activity. As described in our previous blog article series, IDD sensitive data needs different handling and duties imposed on the carrier, intermediary and business client, depending on the business case. Click here to learn more.
Claim investigation and payment
The payout – challenge
Now, the claims processing arrives at its final stage – calculation and paying out the indemnification. Although Artificial Intelligence (AI) is considered an attractive tool in claims process automation, parametric insurance is better fit, being a simple and easily adaptable solution for several lines of business.
The parametric insurance payouts can be activated by certain events in cases of ski accidents and pre-specified offers, ensuring faster claims payouts based upon a specific trigger event. Like in the insurance claims process, each payout process meets the following criteria:
- Comprehensible Authorization of payments (4 eyes principle)
- Fraud management
- Anti Money laundry
- Anti Terrorism



Concluding remarks
Undoubtedly, embedded insurance is here to stay, and so are embedded claims. However, for the model to function flawlessly, a complete embedded claims process has to be enabled in the sales channels, does not matter if it’s an app or website. A claims process always comes underneath an embedded insurance surface and is an inevitable part of the model’s success.
A 360-degree overview of insurance product profitability and unpreceded speed of claims handling are some of the benefits that embedded claims can bring to the business. Today embedded insurance provides a competitive advantage and enables all involved parties to thrive in a digital environment. Everyone has a strategic step to make – to be disrupted or be the disruptor with new products, services, and business models.