Digital carrier iptiQ is reaping the rewards of its investments with significant North American expansion over the past 18 months, while opportunities in the Swiss Re subsidiary’s established B2B2C offering offering continue to arise even as competition in the middle market continues to drive up acquisition costs, Niels Keuker has told The Insurer. 


iptiQ, Swiss Re’s digital B2B2C insurance company, seeks to establish partnerships with insurers, brokers, banks and consumer brands. It develops and offers life and non-life insurance products, as well as data analytics and an end-to-end digital platform, that allow its partners to deliver various offerings to customers “with maximum efficiency and minimal fuss”.

In North America, where it has been active for the past six years, iptiQ is focused on the middle market life and health sector, targeting customers whose household income ranges from $50,000 to $150,000.

While various definitions of embedded insurance exist, in its simplest form, the sector is focused on the sale of insurance during a transaction for another commercial product or service. A classic example is the purchase of travel insurance when buying a holiday or flight online.

As Keuker, president and regional market executive for iptiQ Americas, explained, interest in embedded insurance has increased as acquisition costs in the traditional D2C market have accelerated.

“Selling insurance into the customer base of an insurance company, or a big corporate with a large customer base, eliminates a lot of lead costs,” he explained.

“It isn’t a fully-fledged, developed and mature market though, and we still have to learn a lot. What is the right offering at the right time? How do you create a logical connection for a consumer when they get that embedded insurance offering? What’s the right cross- or up- sell moment to bring assurance to the table?

“A lot of optimization and learning needs to be done, and that’s why the segment is still in development,” said Keuker.

Not straightforward

“There’s a lot of industry talk about embedded insurance - in theory it sounds quite simple to just connect an insurance offering into an installed customer base and connect at a different point than the traditional D2C method, but it’s clearly not as simple as that.”

As the executive explained, succeeding in the embedded market requires considerable work on consumer targeting, and then positioning the product from a marketing perspective. Customers frequently need agent support too, so it is important to factor in how that may be integrated.

“Having a product offering and a technology platform, which is often enough in the D2C space, is not sufficient for embedded sales.

Niels Keuker, president and regional market executive for iptiQ Americas

“Working with large corporates that have a fantastic brand and a large customer base, insurers need to bring much more of the targeting, marketing and sales execution capabilities to the table,” stated Keuker.

As Keuker noted, iptiQ has made considerable investment in the space and built a proprietary consumer targeting and offering solution which the company has deployed with several partners.

“We have built marketing and sales capabilities so we can support the partner with the end-to-end insurance program, and so that has really translated into a lot of growth that we’ve seen in that channel over the last 12 to 18 months and we expect it to continue,” he said.

D2C competition intensifies

Increased interest in embedded insurance comes as margins in the more traditional D2C sector, especially for middle market life and health business, tighten as competition intensifies.

“The middle market has historically always been a fascinating opportunity, but it’s not an easy opportunity to crack because there are a lot of challenges,” said Keuker.

As Keuker highlighted, iptiQ is far from the only company that has spotted an opportunity to offer digital solutions to the middle market, with various new entrants coming into the space as well as incumbent carriers establishing platforms to tap into the segment.

“We’ve also seen a lot of insurtech focused on that middle market as well, mainly on the distribution side, but also on the on the data and technology side, all trying to solve the middle market insurance gap and introduce easy, accessible and affordable solutions to consumers,” said Keuker.


With new entrants coming into the sector, acquisition costs have increased, with lead prices “up significantly”, said Keuker.

“An average lead cost we see in the life market is easily $45 to $50, and on average, if you’re doing really well, you get a conversion of 10 percent. So if one in every 10 leads you’re able to convert, that means that you’re already $450 down just on the cost for leads,” he said.

Agent costs – another key element of the D2C transaction – are also on the rise as that community reduces in number owing to retirements and fewer people entering the industry, explained Keuker.

“So both the lead and the agent costs have gone up, while the revenue side - the commission that distributors get paid - has remained pretty stable.

“The margins are getting thinner, and so you really need to focus on every single angle of the value chain to get it right, otherwise you can easily make a loss on these sales.”

New solutions

These challenges mean traditional digital products like guaranteed or simplified issue, which have historically been straightforward to sell, are now being charged at prices that Keuker said “are often quite unsustainable”, and so result in “very high lapses”.

However, Keuker said iptiQ has “really pushed the boundaries” and focused on products that “are sort of in the middle ground between fully underwritten and guaranteed issue”.

“We want to leverage as much underwriting innovation as possible to continue to have a streamlined approach, but at the same time, offer more competitive rates that are closer to the fully underwritten side of the market.

“That’s created a lot of traction there, and that’s why we were able to grow quite a bit in the digital middle market segment,” Keuker explained.