Merchants Insurance Currently Use or Not?

Despite the fact that Black Friday is over, merchants, particularly those in e-commerce, continue to face real concerns regarding the lack of protection they have for their goods in transit. The evidence is clear from the numbers; In the $33 billion global market, less than 10% of goods are insured, and with one in five Brits reporting lost or stolen packages, underinsurance is common. Merchant Insurance Group Learn About Your Personal Insurance Tips.

The problem with courier protection

Far too frequently, businesses rely on couriers to transport their goods and protect them during transit, not realizing that this protection is typically insufficient for their requirements. Although courier protection is convenient and frequently comes at no cost, it frequently operates under limited liability. This means that retailers must cover the costs (through replacements or refunds) in order to keep customers satisfied because items are rarely insured to their full true value. Even "enhanced protection," which is insurance that costs money, has a limit on how much an item can cost. If an item worth more than the limit is lost or damaged in transit, merchants can't get their money back. Custom insurance from a broker is an alternative, but it can be difficult, time-consuming, and expensive. As a result, merchants frequently choose courier protection because it is more convenient.  

Insurance isn’t merchant friendly

In terms of convenience, insurance in the goods-in-transit sector still requires far too much manual labor. For instance, the claims process is extremely cumbersome and requires so much manual administration that settling a claim can take months. It seems absurd that despite having digitalized their entire businesses, especially those in e-commerce, claimants still need to submit physical paperwork. Additionally, many policies limit the merchant's ability to file a claim to just 14 days. Due to the fact that this, in addition to caps on reimbursements, is not particularly merchant-friendly, there is a significant lack of trust in the claims procedure.

 

The role of embedded insurance

The number of insurtech companies developing insurance products that are driven by APIs and can be embedded at specific points along the customer journey has increased. For the customer, it could be at the point of purchase, or for the merchant, it could be at the point of dispatch. Not only are these products extremely convenient, They can also be tailored to the particular product being shipped or to a specific value range of goods in transit, providing merchants with protection that is more specific, pertinent, and adequate. Because merchants only pay for the insurance they need, and because an API-driven product does not require as much delivery resource as a manual insurance product, this can reduce insurance premiums.

Parametric claims technology is also being used more and more in embedded insurance. The claims procedure is frequently viewed as the insurance industry's "shop window." a crucial component of the overall customer experience. A non-traditional insurance product, parametric insurance—also known as index-based insurance—provides predetermined payouts in response to a trigger event. An important component of the goods-in-transit insurance product that Anansi offers are parametric claims; Parametric coverage for claims that are lost or delayed is made possible by the fact that it makes use of shipping tracking data to ascertain the condition of packages during transit.

Because claims are generated automatically on their behalf, merchants do not need to do anything. Merchants are able to swiftly resolve any shipping issues and ensure that their customer experience is not negatively impacted by this technology because it removes the manual process from insurance, saving both time and money. 

Merchants can use the products to better safeguard their shipments. Sadly, the majority of merchants do not even consider insuring their goods due to the environment of distrust created by past experiences with non-digitized processes, difficulties when claiming, and a conflict of interest with the courier that provides both carriage and protection for the goods. However, merchants now have access to convenient and adequate insurance products that enable them to protect their goods, their bottom line, and, most importantly, the customer experience by embracing technology and the advantages of embedded insurance and automating the customer journey.

 

The embedded insurance distribution platform Anansi, founded by Megan Bingham-Walker, makes it simple for; third-party logistics partners, fulfillment companies, e-commerce and shipping platforms, and online marketplaces to provide their merchants with direct API access to the Anansi goods-in-transit insurance product within their own frontend environment.