Guest Writer - Owen: Reinventing bankcard insurance

december 2024

Bankcard insurance is obsolete: little-known and little-used, it's expensive with no real added value. To reinvent it, personalization, simplicity and impact are key, given that neo-banks are innovating, increasing customer satisfaction and subscriptions with targeted, effective offers.

The bankcard insurance sector is in a state of disarray. Aged and underused, it is totally unsuited to the needs of today's consumers. Here's an edifying statistic from the Insurance Ombudsman in 2023: less than 30% of cardholders know what their insurance actually covers, and less than 3% use it. Every year, hundreds of millions of euros are invested in guarantees that bring no value to either customers or banks.

But how can we reinvent card insurance so that it (re)becomes a loyalty lever rather than a forgotten commodity? By working with innovative players and committed insurers.

An outdated model that no longer works

Current coverages are rigid and generic. Take travel insurance, for example, which is still limited to specific cases such as a family death or medical emergency. Yet users' real needs are much broader: they expect automatic reimbursements in the event of delays or bad weather, immediate advances for lost or stolen luggage, and easy access to medical teleconsultations when traveling.

Other issues remain unaddressed. For example, eco-responsible behavior, such as leasing low-emission vehicles, is not promoted. Businesses, which are increasingly adopting hybrid models or opting for fleets of bicycles or shared cars, do not have access to cover tailored to their specific needs. These shortcomings show that traditional insurance linked to bank cards is out of touch with new ways of consuming insurance.

The new deal: personalization, simplicity and collective impact

To restore meaning to these insurances, we need to rethink them around three axes: personalization, simplicity and collective impact. Here are a few examples of what works for emblematic personas:

• For young professionals: neo-banking partners now offer "no-cause cancellation" insurance, access to airport lounges and affordable concierge services. Benefits truly aligned with their lifestyle.
• For eco-responsible users: A bonus/malus system for rental cars that encourages low-emission choices.
• For businesses: SMEs can cover their fleets against loss of keys, or finance points recovery courses. Large companies can protect their employees' IT equipment and electric bikes with simplicity and useful services: a cell phone or bike stolen? or in need of prolonged repair? Next-gen insurance provides replacement mobiles and bikes within 48 hours.

Concrete results that prove their effectiveness

The first initiatives are already showing that this transformation is working: a flexible cancellation guarantee has boosted premium card subscriptions by 25% for some neo-banks. With regard to eco-responsibility, a "second life" program for recycling or reselling insured goods has seen an 18% activation rate in six months at one neo-bank partner. In both cases, accelerated claims handling (48 hours or at least an almost immediate response to a claim) boosted customer satisfaction scores, with a +25 point increase in NPS.

These figures prove that well-thought-out solutions don't just meet expectations: they create a strong bond with users.

Insurance as a strategic lever

Neo-banks have a unique opportunity to transform card insurance into a genuine acquisition lever. Insurtechs have already begun to transform the sector. The future of insurance lies not in generic, invisible cover, but in customizable, comprehensible services capable of rallying a community of users around a useful, engaging offer.