3 ways business insurance can help neobanks attract and retain customers
In a nutshell
- Embedded insurance on payment cards can help business neobanks stand out from the competition.
- Standalone insurance products can then further differentiate your offer and convert business owners to paid plans.
- A digital insurance provider can simplify the process and eliminate guesswork for your end users.
A survey by Deloitte found that the pandemic has exposed gaps in coverage for many small businesses, driving ‘heightened buyer awareness’ for insurance. What’s more, 85% of respondents are open to purchasing insurance from a nontraditional channel – with banks being the top choice.
In addition to increased consumer demand, there are multiple ways that insurance can drive growth for B2B neobanks and money apps. So although insurance may not be top of mind for business-oriented fintechs, here are three reasons why it should be.
1. Attract business customers by standing out from competition
The B2B neobank world might lag behind the B2C space, but as new competition emerges, it’s important to find ways to stand out – whether that’s fellow money apps or traditional banks.
‘With online purchases and travel becoming a bigger part of the everyday lives of business people, business insurance has become indispensable,’ says Denis Kiselev, CEO of Luxembourg fintech SnapSwap.
Luckily, that means those who incorporate insurance now will be ahead of the game. And that’s exactly what Snapswap did for its corporate payment solution Everest.
‘One of our major goals is to protect our customers on many levels’, Denis says. ‘Not only in terms of banking and expense management, but also by ensuring protection for their Everest card purchases and business travels.’
Embedded insurance, which is built into your payment cards, is a good first step.
These embedded insurance products, such as travel and purchase protection, are especially vital for start-ups and SMEs looking for that added peace of mind.
In the case of Everest, they created value for their corporate customers through purchase protection and travel insurance, which includes travel inconvenience coverage for delayed or missed flights, lost luggage and personal accident.
These are just a few possible insurance products that money apps can use to draw in new customers.
2. Convert corporate users to paid plans through added value
Now that you’ve got the attention of certain companies with embedded insurance, it’s time to monestise them.
We often hear from neobanks that they struggle to get users to convert to a paid plan. So if you want your customers to take your offer seriously and commit to a premium plan, then embedded business insurance is a great incentive.
For many companies, insurance is the last thing they want to worry about. So while they might not actively seek it out, it’s incredibly valuable for their sense of security and bottom line. Even better: if you can further diversify your portfolio of insurance products to suit their needs.
Embedded insurance can serve as the basis for using standalone products to further differentiate your offer in a more targeted way. That way, you can layer on products that add even more value for business owners, such as fraud protection, liability insurance, key person insurance and cyber insurance.
Cyber attacks and data leaks can be detrimental to SMEs. If a company’s client data is leaked, the company might be held liable. This is where cyber insurance could be extremely useful.
Companies are much more likely to search – and pay – for an all-in-one solution for their insurance needs.
Not only does converting your audience into paid users generate more revenue for you, but it creates a domino effect for customer loyalty and ambassadorship.
The right insurance partner can help you figure out the best products for your users as well as how to bundle them in the most attractive way.
3. Retain existing users with clear, simple business insurance
Business insurance as it is today is often complicated and time-consuming – which leaves business owners searching for an easy solution.
One start-up cofounder we spoke to put it simply: ‘We don’t really know what we’re doing when it comes to insurance.’
By offering built-in protection that automatically covers purchases made with a corporate card, you give companies – from freelancers to entrepreneurs – one less thing to worry about.
After all, Qonto began offering insurance on its business accounts to alleviate SMEs ‘from the hassles of everyday life from the very beginning of [their] activity.’
For Everest, a simple product was key. ‘Our aim was to provide all of our customers with the support and security for everyday tasks that come with using the Everest card – and to make this insurance easy to use and understand,’ Denis says.
But it helps to go one step further and make the process of obtaining this insurance as straightforward as possible. And as you know, a seamless, digital experience for your customers goes a long way.
‘It’s such a hassle to get insured,’ the co-founder told us. When he started looking for insurance for his Belgian e-commerce start-up, it was a lengthy process: going through a traditional broker often requires tons of steps, not to mention vetting and comparing providers.
As a fintech, you need the right partner with the right tech DNA to ensure a quick, painless and digital insurance process.
At Qover, we collaborate with fintechs to find the best set of products for their audience, with quick implementation. This flexibility extends to our online claims process that can be integrated into any app or website.
‘Our collaboration with Qover is an asset in attracting new, as well as satisfying our current, [Everest] customers,’ Denis says. ‘With a 100% digital model [that’s] simple and accessible, and with extensive experience in the European market, Qover is the ideal partner to accompany us in our expansion.’
Get in touch with us to see how you can level up your money app with the help of insurance.