Smartpay launches "Embedded Insurance Service" in partnership with Chubb
Smartpay, provider of the "Smartpay" Buy Now Pay Later service, is launching embedded insurance products in the Japanese market, following one year of partnership with Chubb Insurance Japan, the Japanese subsidiary of Chubb Group, a world leader in insurance.
Smartpay and Chubb Japan plan to provide their first embedded insurance product in BNPL in partnership with Fútbol Opción, a soccer cultural exchange program provider operated by Actif LLC, in summer 2025.
While soccer cultural exchange programs represent a significant investment for families, Smartpay's installment payment option makes it possible to realize children's dreams while reducing the burden on household finances. Additionally, having insurance coverage during international travel is a crucial element for parents' peace of mind. Through this partnership, families can now handle both program fee installments and insurance enrollment in one process, making soccer exchange opportunities accessible to more young people.
Current Challenges in the Insurance Industry
The traditional insurance industry faces challenges in meeting the evolving needs of modern consumers. Insurance contracting still largely relies on paper-based analog processes, leaving significant room for improvement in digitalization, personalization, real-time capabilities, and security.
According to the Ministry of Economy, Trade and Industry survey, cashless payments now account for approximately 50% of consumer monthly spending, with widespread adoption of diverse payment methods including credit cards and electronic money. The insurance industry has an opportunity to enhance consumer experience by embracing digitalization to capitalize on this trend.
Changes in the insurance industry are becoming evident across various sectors. For example, Japan's travel insurance market reached $678m in 2023 and is projected to grow to $1.523bn by 2028. Furthermore, post-pandemic surveys indicate that 47% of Japanese travelers are seeking new ways to purchase travel insurance that differ from traditional methods.
Additionally, Generation Z consumers tend to prioritize convenience and speed in payment experiences and dislike complicated procedures. These changes in young consumers' behavior are driving the demand for embedded insurance that can be completed with simple operations.
What is Embedded Insurance?
Embedded insurance is a mechanism that provides insurance seamlessly integrated into the payment process when consumers purchase products or services. For example, this includes options to purchase travel insurance simultaneously when buying airline tickets online. This method simplifies the insurance application process and enables appropriate coverage to be provided at the optimal timing for consumers.
Through its partnership with Chubb Japan, Smartpay is bringing innovation to the insurance industry. By providing solutions at the moment of need, Smartpay is transforming the nature of insurance. The embedded insurance technology is seamlessly integrated into the payment process, providing appropriate coverage instantly when customers need it.
Growth Outlook for the Embedded Insurance Market
The global embedded insurance market size is projected to grow CAGR of 11.6% from 2024 to 2030, reaching approximately $175.25bn by 2030. Another report predicts the embedded insurance market will grow at an annual rate of 4.8% from 2025 to 2032.
By region, the Asia-Pacific region is the largest market, accounting for approximately 39% of share. This is followed by Europe at 32% and North America at 21%. By product type, life insurance is the largest segment, accounting for 51% of share. By application, the automotive sector is the largest, accounting for approximately 26% of share.
These data suggest that the embedded insurance market will continue to show steady growth.
Fusion of Technological Innovation and Customer-Centric Design
Embedded insurance goes beyond simply incorporating insurance at the point of payment, achieving comprehensive fintech innovation. It combines the following:
- Real-time Risk Assessment and Dynamic Pricing - A system that provides optimal coverage and pricing for each customer, often making it possible to keep insurance premiums lower
- Highly Secure Complex Infrastructure - Integration of Smartpay's payment system and Chubb's insurance infrastructure
- Seamless Customer Experience - Eliminating complicated procedures, enabling appropriate insurance enrollment at the time of purchase with intuitive and user-friendly experience
Strategic Partnership with Chubb
Chubb is a global company with a track record of successful partnerships with major financial institutions worldwide. In 2018, it partnered with Grab, Southeast Asia's largest super app, to provide insurance products to millions of Grab users. Additionally, it has led digital transformation and technological innovation in the insurance industry, such as partnering with Nubank, Brazil's largest digital bank, to provide fully digitalized life insurance.
In this context, Chubb's selection of Smartpay as its first embedded insurance business partner in Japan demonstrates strong confidence in Smartpay's innovative approach, technological capabilities, and market potential.
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