The ROI of Embedded Insurance: A Data-Driven Analysis

We analyzed data from over 2,500 e-commerce stores using CoverKit to understand the real business impact of embedded shipping protection. The results exceeded our expectations.

Executive Summary

Across our customer base, stores offering shipping protection saw:

Methodology

We analyzed 12 months of transaction data from 2,547 e-commerce stores across various verticals including fashion, electronics, home goods, and specialty retail. The study compared key metrics before and after implementing shipping protection.

To ensure statistical significance, we used a matched-pair design, comparing each store to its own historical baseline and controlling for seasonality, marketing spend, and external factors.

Key Finding #1: Conversion Rate Improvements

The most significant impact was on checkout conversion rates. Stores offering shipping protection at checkout saw an average 32% increase in completed purchases.

Why? Shipping protection addresses one of the top customer concerns: what happens if my package is lost or damaged. By offering peace of mind at checkout, customers feel more confident completing their purchase.

Key Finding #2: Higher Average Order Values

Customers who opt for shipping protection spend more per order. The average increase in AOV was 18%, with some categories seeing increases of up to 35%.

This makes intuitive sense. When customers know their purchase is protected, they are more likely to add additional items or choose premium variants. The psychological barrier of potential loss is removed.

Key Finding #3: Improved Customer Lifetime Value

Perhaps the most interesting finding was the impact on customer lifetime value. Customers who purchased shipping protection on their first order were:

• 2.3x more likely to make a repeat purchase within 90 days
• 4.1x more likely to leave a positive review
• 67% less likely to initiate a chargeback

This suggests that shipping protection does not just protect the current transaction but builds long-term customer trust and loyalty.

Key Finding #4: Revenue Opportunity

Beyond the indirect benefits, shipping protection creates a direct revenue stream. With typical attachment rates of 25-40%, stores earn an average of $0.89 per order in protection revenue.

For a store processing 10,000 orders per month, this translates to $8,900 in additional monthly revenue with virtually no additional overhead.

Implications for E-Commerce Leaders

Our data suggests that shipping protection is not just a nice-to-have feature but a strategic investment with measurable ROI. The combination of improved conversion, higher AOV, and increased LTV creates a compelling business case.

Ready to see what shipping protection can do for your business? Start your free trial or read customer success stories.