SAN FRANCISCO, CA – Embedded insurance—coverage offered at the point of sale when purchasing products or services—is rapidly becoming the dominant distribution model for consumer and small business insurance. According to October 2025 analysis from Bain & Company, embedded insurance premiums will reach $722 billion globally by 2030, up from $112 billion in 2025, representing a 545% increase in just five years.
This isn't a small trend on the periphery of insurance—it's a fundamental reshaping of how insurance is distributed and purchased. Within the next 3-5 years, most consumers and small businesses will buy the majority of their insurance through embedded channels rather than traditional agents, brokers, or direct insurance company websites.
What embedded insurance looks like in practice:
- Buying a phone and adding device protection at checkout
- Renting a car and selecting collision coverage during reservation
- Purchasing airline tickets and adding trip cancellation insurance before payment
- Opening an online store and being offered e-commerce liability insurance during platform setup
- Signing up for SaaS software and opting into cyber insurance as part of subscription
- Buying a home appliance and adding warranty/breakdown coverage at checkout
Why embedded insurance is exploding: It combines superior customer experience (coverage offered when and where you need it) with superior economics (higher conversion rates, lower acquisition costs, better data for underwriting).
For traditional insurance distribution—agents, brokers, and insurance company direct channels—embedded insurance represents both existential threat and enormous opportunity. Understanding this shift and adapting to it will determine which insurance distributors thrive and which become obsolete.
What Is Embedded Insurance?
The Definition
Embedded insurance: Insurance coverage seamlessly integrated into the purchase of another product or service, offered at the point of sale as a native part of the buying experience.
Key characteristics:
Contextually relevant: Insurance is offered when the need is obvious (phone insurance when buying phone, not randomly months later)
Seamlessly integrated: Embedded in existing transaction flow, not separate application process
Simple and fast: No lengthy applications or underwriting delays—instant or near-instant approval
Designed for the product: Coverage is specifically tailored to the product/service being purchased
Often bundled or included: May be included in purchase price or offered as simple add-on
How Embedded Insurance Differs From Traditional Insurance
Traditional insurance purchasing:
- Realize you need insurance (often triggered by requirement or incident)
- Research insurance options
- Contact agent/broker or visit insurer websites
- Complete lengthy application
- Wait for underwriting decision
- Negotiate terms and price
- Finalize purchase
- Receive policy days or weeks later
Timeline: Days to weeks Friction: High (multiple steps, forms, waiting) Conversion: Low (3-8% of people who start don't complete)
Embedded insurance purchasing:
- Buying product/service
- Offered relevant insurance at checkout
- Click to accept
- Coverage included in purchase
- Receive instant confirmation
Timeline: Seconds Friction: Minimal (1-2 clicks) Conversion: High (18-35% conversion rates for well-designed embedded insurance)
The Economics: Why Embedded Insurance Is Exploding
Conversion Rates Are 3-8x Higher
Traditional insurance quote-to-policy conversion rates:
- Auto insurance: 4-7%
- Homeowners insurance: 3-6%
- Small business insurance: 2-5%
Embedded insurance conversion rates:
- E-commerce shipping insurance: 28-42%
- Device protection (phones, electronics): 22-35%
- Travel insurance at flight booking: 15-25%
- Rental car insurance: 18-30%
- SaaS cyber insurance: 12-18%
Why embedded conversion is higher:
Relevance: Insurance offered exactly when need is obvious
Timing: Offered at moment of heightened financial commitment (consumer is already spending money, incremental cost is easier to accept)
Simplicity: One click, no forms, instant coverage
Framing: Presented as protection for purchase you're already making (not separate decision)
Trust: Offered by brand you're already trusting with purchase
Example: A consumer buying a $1,200 laptop online.
Traditional insurance approach: Consumer finishes purchase, leaves website, later Googles "laptop insurance," visits multiple insurance sites, compares policies, applies. Conversion: 3-5%
Embedded insurance approach: At checkout, offered device protection for $8.99/month. "Protect your new laptop from accidental damage, theft, and mechanical breakdown. Coverage starts immediately." One click to add. Conversion: 28-35%
Customer Acquisition Costs Are 60-85% Lower
Traditional insurance customer acquisition costs (CAC):
- Digital marketing (Google/Facebook ads): $80-250 per policy
- Agent/broker commission: $150-400 per policy
- Direct mail: $60-180 per policy
- TV/radio advertising: $120-300 per policy (allocated)
Embedded insurance customer acquisition costs:
- Revenue share to distribution partner: 20-40% of premium
- Technology/integration: $15-30 per policy (amortized)
- Effective CAC: $25-80 per policy (for typical embedded insurance products)
Why embedded CAC is lower:
- No advertising spending (distribution partner provides customer access)
- No agent commissions (replaced by lower rev-share to platform)
- Minimal underwriting costs (streamlined processes, automated decisioning)
- High conversion rates spread fixed costs over more policies
Example economics—Phone insurance:
Traditional approach:
- Annual premium: $120
- CAC (digital marketing + call center): $95
- Loss ratio: 65% ($78 claim costs)
- Operating expenses: 18% ($22)
- Profit margin: -18% (lose $22 per policy in year one)
Embedded approach (offered at phone purchase):
- Annual premium: $120
- CAC (rev-share to phone retailer): $24 (20% of first-year premium)
- Loss ratio: 58% ($70 claim costs, better data reduces fraud)
- Operating expenses: 12% ($14, streamlined processes)
- Profit margin: 10% ($12 profit in year one)
The embedded model is profitable from day one while traditional model requires multi-year customer retention to break even.
Better Data Enables Better Underwriting
Traditional insurance underwriting: Insurer asks consumer questions about risk factors, verifies some information, uses historical data to price
Limited data quality:
- Self-reported information (may be inaccurate or incomplete)
- Verification is expensive and time-consuming
- Missing contextual details about specific use case
Embedded insurance underwriting: Platform providing embedded insurance often has rich data about the customer and product
Example—E-commerce shipping insurance:
- Platform knows exact product being shipped (value, fragility, category)
- Knows shipping method and carrier
- Knows destination ZIP code (risk of theft/damage varies by location)
- Knows shipper's historical claims (if any)
- Can price precisely based on actual risk
Result: Better risk selection (avoid bad risks), more accurate pricing (charge appropriate premium for actual risk), lower losses (fraud is harder when platform has complete data).
Research finding (Bain & Company, 2025): Embedded insurance loss ratios average 8-12 percentage points lower than traditional insurance for equivalent coverage due to superior data and risk selection.
The Embedded Insurance Landscape: What's Already Embedded
Consumer Insurance
1. Device Protection (Phones, Electronics, Appliances)
Market size: $18.4 billion annual premium (2025) Examples:
- Apple Care+ (phones, tablets, watches)
- Amazon device protection (electronics, appliances)
- Best Buy Geek Squad Protection
- Carrier device insurance (Verizon, AT&T, T-Mobile)
How it works: Offered at device purchase, covers accidental damage, theft, mechanical breakdown
Typical pricing: 8-12% of device cost annually
Conversion rates: 25-35%
2. Warranty and Extended Warranty
Market size: $52.3 billion annual premium (2025) Examples:
- Auto extended warranties (at vehicle purchase)
- Home appliance warranties (at appliance purchase)
- Furniture protection plans
- Electronics extended warranties
How it works: Extends manufacturer warranty or covers additional perils
Conversion rates: 15-28%
3. Travel Insurance
Market size: $8.7 billion annual premium (2025) Examples:
- Flight booking travel insurance (Expedia, Airlines)
- Hotel cancellation protection
- Vacation rental insurance (Airbnb, VRBO)
- Cruise insurance
How it works: Offered during booking, covers trip cancellation, medical emergencies, lost luggage
Conversion rates: 12-22%
4. E-commerce Insurance
Market size: $4.2 billion annual premium (2025) Examples:
- Shipping insurance (offered at checkout)
- Return protection
- Price drop protection
- Delivery guarantee
How it works: Covers loss/damage in shipping, return costs, price changes
Typical pricing: 1-3% of order value
Conversion rates: 25-40%
5. Rental and Sharing Economy Insurance
Market size: $11.8 billion annual premium (2025) Examples:
- Rental car insurance (at car rental)
- Peer-to-peer rental insurance (Turo, Getaround)
- Vacation rental host insurance (Airbnb, VRBO)
- Equipment rental insurance
How it works: Covers collision, liability, and loss during rental period
Conversion rates: 18-32%
Small Business Insurance
1. E-commerce Business Insurance
Market size: $3.1 billion annual premium (2025) Examples:
- Shopify Capital insurance (bundled with business loans)
- Amazon seller insurance (liability for FBA sellers)
- Etsy seller protection
- Square/Stripe business insurance
How it works: Platform offers general liability, product liability, or business owners policy to sellers
Why it's growing: Many platforms require sellers to carry insurance; embedded options are easiest path to compliance
Conversion rates: 14-25%
2. SaaS Cyber Insurance
Market size: $2.4 billion annual premium (2025) Examples:
- Microsoft 365 cyber insurance (bundled with subscription)
- Slack security insurance
- Zoom cyber liability
- AWS/Azure cyber insurance options
How it works: SaaS provider partners with insurer to offer cyber coverage to customers
Why it makes sense: SaaS customers are exposed to cyber risk; offering insurance at subscription sign-up is natural fit
Conversion rates: 8-16%
3. Gig Economy Worker Insurance
Market size: $6.8 billion annual premium (2025) Examples:
- Uber/Lyft commercial auto insurance (embedded in driver platform)
- DoorDash/Instacart occupational accident coverage
- Upwork/Fiverr professional liability
- TaskRabbit general liability
How it works: Platform provides insurance to workers (sometimes required, sometimes optional)
Funding: May be included in platform fees or worker-paid
Why it's essential: Traditional insurance often excludes gig economy activities; embedded insurance fills the gap
4. Small Business Banking Insurance
Market size: $1.9 billion annual premium (2025) Examples:
- Square business checking + insurance bundle
- Stripe Treasury + insurance
- PayPal business account + coverage options
- Novo small business insurance
How it works: When opening business checking account or payment processing, offered relevant insurance
Types offered: General liability, professional liability, commercial property, cyber
Conversion rates: 6-12%
The Technology Enabling Embedded Insurance
API-First Insurance Infrastructure
Traditional insurance technology: Monolithic systems built decades ago, difficult to integrate with external platforms
Modern embedded insurance technology: API-first design allowing real-time integration with any distribution platform
What APIs enable:
- Instant quoting: Distribution partner sends customer/product data, receives quote in milliseconds
- Real-time binding: Coverage activates immediately upon purchase
- Automated underwriting: Rules engine evaluates risk and approves/declines automatically
- Claims integration: Claims filed through distribution partner's platform, not separate insurer portal
- Data exchange: Bidirectional data flow between insurer and platform
Example—E-commerce shipping insurance:
- Customer places order on e-commerce site
- At checkout, site API calls insurance provider: "Quote for shipping insurance on $280 order to ZIP 10001, electronics category, USPS Priority Mail"
- Insurance API responds in 180 milliseconds: "Premium: $5.80, coverage: loss/damage up to $300, claim filing: site.com/claims"
- Customer clicks "Add insurance"
- API immediately binds coverage, returns policy number
- Insurance confirmation included in order confirmation email
- If package is lost/damaged, customer files claim through original e-commerce site (not separate insurer site)
End-to-end transaction: 2 seconds from quote to bound coverage
Low-Code/No-Code Insurance Building Blocks
Embedded insurance platforms (insurtech infrastructure companies) provide:
Product builders: Configure insurance products without coding
- Define coverage terms, exclusions, pricing variables
- Set underwriting rules (approve if X, decline if Y)
- Create policy documents automatically
- Build claims workflows
Integration tools: Connect to distribution partners easily
- Pre-built integrations for major platforms (Shopify, Stripe, Square)
- SDKs for custom integration
- Webhooks for event-driven updates
- White-label interfaces
Compliance automation: Handle regulatory requirements
- Multi-state licensing and compliance
- Rate filing automation
- Policy form approvals
- Regulatory reporting
Examples of embedded insurance infrastructure companies:
- Boost Insurance: E-commerce and warranty embedded insurance platform
- Sure: Mobile and digital-first embedded insurance platform
- Qover: European embedded insurance infrastructure
- CoverGenius: Travel and warranty embedded insurance platform
- Trōv: On-demand embedded insurance platform
Why these platforms matter: Distribution partners (e-commerce sites, SaaS companies, marketplaces) can offer insurance without becoming insurance experts or building insurance infrastructure themselves.
Data Integration and Enrichment
Embedded insurance works best with rich data:
Data distribution partners provide:
- Customer information (contact, payment, history)
- Product/service details (what's being insured)
- Transaction context (price, timing, method)
- Historical behavior (claims history if prior customer, purchase patterns)
Data insurers provide:
- Risk scores and pricing models
- Claims history and fraud indicators
- Underwriting guidelines
- Coverage options
Enrichment services (third-party data providers):
- Address verification and risk scoring
- Credit and identity verification
- Fraud detection signals
- Market pricing benchmarks
Result: More accurate risk assessment, better pricing, lower fraud, higher approval rates.
The Business Models: How Embedded Insurance Is Monetized
Revenue Share Model
How it works:
- Distribution partner embeds insurance in their platform
- Insurer underwrites risk and handles claims
- Revenue split between distribution partner and insurer
Typical split:
- Distribution partner: 20-40% of premium
- Insurer: 60-80% of premium (must cover claims, overhead, profit)
Example—E-commerce platform:
- Merchant sells product for $100, offers shipping insurance for $3
- Customer buys insurance: $3 premium
- E-commerce platform keeps: $1.20 (40% rev-share)
- Insurer receives: $1.80 (covers claims, expenses, profit)
Why distribution partners like it: Incremental revenue with no claims risk
Why insurers like it: Access to customers at low CAC
Platform Fee Model
How it works:
- Distribution partner charges fee to access platform
- Insurance included in fee (or offered as premium tier benefit)
- Insurer pays distribution partner for customer access
Example—SaaS platform:
- SaaS company charges $50/month for software
- Premium tier: $75/month including cyber insurance
- $25 premium increase funds insurance coverage
- Insurer pays SaaS company $5-10/month for customer access and data
- Remaining $15-20/month covers insurance costs
Why distribution partners like it: Differentiates premium tiers, increases customer lifetime value
Why insurers like it: High retention rates (insurance bundled with sticky software subscription)
Risk Transfer Model
How it works:
- Distribution partner wants to offer protection to customers
- Distribution partner could self-insure but prefers to transfer risk
- Insurer takes on risk in exchange for premium
Example—Marketplace platform:
- Marketplace guarantees sellers will get paid for delivered goods
- Rather than self-insure this guarantee, marketplace buys insurance
- Insurer covers marketplace's guarantee obligations
- Marketplace charges buyers small fee (included in transaction fees)
Why distribution partners like it: Eliminates balance sheet risk
Why insurers like it: Large, predictable premium volume
Affinity Program Model
How it works:
- Distribution partner has loyal customer base
- Partners with insurer to offer exclusive coverage
- May include discounted rates or enhanced coverage
Example—Professional association:
- Association has 50,000 members
- Partners with insurer for professional liability coverage
- Members access coverage through association portal
- Association earns endorsement fee or rev-share
Why distribution partners like it: Member benefit, creates loyalty
Why insurers like it: Access to defined, understandable risk pool
The Winners and Losers in the Embedded Insurance Shift
Who Benefits
Distribution Platforms
E-commerce platforms (Shopify, Amazon, Etsy):
- New revenue stream (20-40% of insurance premium)
- Better customer experience (one-stop shopping)
- Competitive differentiation (sellers prefer platforms offering insurance)
Financial services platforms (Stripe, Square, PayPal):
- Deeper customer relationships (providing more services)
- Higher customer lifetime value (cross-sell insurance to payment customers)
- Data monetization (payment data improves insurance underwriting)
SaaS platforms (any software serving business customers):
- Revenue diversification (less reliance on software subscriptions alone)
- Customer retention (bundled insurance creates stickiness)
- Risk mitigation (cyber insurance for customers reduces platform's risk of customer breaches affecting platform reputation)
Sharing economy platforms (Airbnb, Uber, Turo):
- Regulatory compliance (many jurisdictions require insurance for platform workers/users)
- Trust and safety (insurance reassures users)
- Risk transfer (platform doesn't bear risk of user incidents)
Embedded Insurance Technology Companies
Infrastructure providers (Sure, Boost, Qover):
- Enabling the entire ecosystem
- Revenue from SaaS fees and transaction percentages
- Rapid growth as embedded insurance expands
Forward-Thinking Traditional Insurers
Insurers partnering with platforms:
- Access to massive distribution at low CAC
- Rich data for better underwriting
- Younger customer demographics (embedded insurance reaches digital-native consumers)
Examples: Munich Re (partners with Apple for device insurance), Assurant (powers many embedded warranty programs), Coalition (cyber insurance embedded in SaaS platforms)
Who Faces Challenges
Traditional Insurance Agents and Brokers
The threat: Many simple insurance products moving to embedded channels where agents aren't involved
Products most at risk of disintermediation:
- Device protection (already mostly embedded)
- Warranty/extended warranty (rapidly moving to embedded)
- Simple business insurance (GL, PL for microbusinesses moving to embedded)
- Event/short-term insurance (travel, event cancellation moving to embedded)
Products less at risk (still require expertise and complex underwriting):
- Commercial property and casualty (complex risks)
- Large group benefits (employee benefits for large employers)
- High-value personal lines (high-net-worth insurance)
- Specialty and hard-to-place risks
Agent/broker adaptation strategies:
- Focus on complex risks: Embedded insurance handles simple products; agents add value on complex ones
- Become consultants: Advise clients on entire risk program including embedded options
- Partner with platforms: Some platforms want agent involvement for complex sales
- Offer embedded insurance: Agents can embed insurance in their own service offerings
- Emphasize relationships: Long-term trusted advisor relationships can't be fully replaced by embedded algorithms
Traditional Insurance Company Distribution
Direct-to-consumer insurance websites:
- Losing customers to more convenient embedded options
- Higher CAC than embedded models
- Must compete on more than just price
Captive agents (State Farm, Allstate agents):
- Face erosion of simple product sales
- Must focus on complex products and multi-line relationships
- Need to offer digital convenience to compete
Insurance comparison sites (Insurify, Policygenius):
- Embedded insurance bypasses comparison shopping
- Must add value beyond just price comparison
How Embedded Insurance Changes Consumer Behavior
Insurance Becomes Invisible
Traditional insurance: Separate purchase requiring conscious decision, research, and effort
Embedded insurance: Integrated into other purchases, feels like feature or add-on rather than separate product
Psychological impact: Insurance shifts from "necessary evil I must research and buy" to "protection option offered when I need it"
Result: Higher penetration (more people buying insurance because friction is eliminated)
Micro-Purchases vs. Annual Policies
Traditional insurance: Annual policy, large upfront premium or monthly payments
Embedded insurance: Often per-transaction micro-purchases (single shipment, single rental, single trip)
Example:
- Traditional: Buy annual phone insurance policy, $144 paid annually or $12/month
- Embedded: Pay $3.99 per month through device warranty tied to phone purchase
Consumer preference: Depends on usage patterns
- Frequent users: Prefer annual policies (cheaper per use)
- Infrequent users: Prefer per-transaction (only pay when needed)
Industry trend: Shift toward flexible, on-demand coverage matching actual usage
Coverage Becomes Tailored to Purchase
Traditional insurance: Generic policies covering broad categories
Embedded insurance: Specific coverage tailored to exact product/service purchased
Example—Rental car insurance:
- Traditional: Buy personal auto policy, hope it covers rental cars, unclear coverage limits
- Embedded: Rental company offers coverage specific to exact vehicle rented, duration, location
Consumer benefit: Clear, relevant coverage without ambiguity
Regulatory Considerations and Challenges
Licensing and Compliance Complexity
Challenge: Insurance is regulated at state level; embedded insurance crosses state lines easily
Example issue: E-commerce platform offers shipping insurance to customers in all 50 states. Insurer must:
- Be licensed in all 50 states
- File rates and forms in all 50 states (some require advance approval)
- Comply with 50 different sets of insurance regulations
- Handle 50 different claim regulations
Solution approaches:
- Insurtech platforms handle compliance: Infrastructure providers like Sure and Boost obtain licenses and manage regulatory compliance
- Multiple insurer partners: Use different insurers in different states based on licensing
- MGA models: Managing general agents licensed in multiple states distribute on behalf of insurers
Consumer Protection Concerns
Regulatory concerns:
Disclosure: Are consumers adequately informed about coverage terms?
- Concern: Embedded insurance sold with single click may lack detailed explanation
- Regulatory response: Requirements for clear, conspicuous disclosures at point of sale
Price transparency: Can consumers easily compare embedded insurance to alternatives?
- Concern: Embedded insurance may be more expensive than standalone policies
- Regulatory response: Requirements to disclose that coverage may be available elsewhere at lower cost
Claims handling: Will claims be handled fairly when insurer is partnered with distribution platform?
- Concern: Potential conflicts of interest in claims decisions
- Regulatory response: Traditional insurance claims regulations apply; independent claims handling required
Unwanted coverage: Are consumers being sold coverage they don't need or pressured to buy?
- Concern: "Dark patterns" in UX design may manipulate consumers into buying unnecessary insurance
- Regulatory response: Prohibitions on deceptive sales practices
State Regulatory Responses
States are actively regulating embedded insurance:
California: Requires embedded insurance to be clearly identified as insurance, with prominent disclosures
New York: Requires DFS approval of embedded insurance programs before launch
Texas: Updated regulations to accommodate embedded insurance while protecting consumers
Illinois: Issued guidance on embedded insurance requiring independent claims handling
Trend: States are adapting regulations to accommodate embedded insurance innovation while maintaining consumer protections
The Future: What Embedded Insurance Looks Like in 2030
Predictions for 2030
1. 60%+ of simple insurance will be embedded
- Device protection: 85% embedded
- Warranty: 75% embedded
- Travel insurance: 70% embedded
- Microbusiness insurance: 65% embedded
- Shipping/e-commerce insurance: 80% embedded
2. Embedded options will exist for nearly every product/service
- Buying furniture → delivery protection and damage protection offered
- Signing lease → renters insurance embedded in lease signing
- Buying concert tickets → event cancellation insurance offered
- Hiring contractor → verify they have embedded liability coverage through marketplace
- Launching app → cyber and E&O insurance embedded in cloud hosting
3. Traditional distribution will focus on complex/custom risks
- Agents and brokers specialize in complex commercial insurance
- High-net-worth personal insurance remains relationship-driven
- Large employee benefits remain consultant/broker-driven
- Simple, standardized products almost entirely embedded
4. AI and data will enable hyper-personalized embedded offerings
- Pricing based on real-time data (not just demographics)
- Coverage automatically adjusted based on usage (pay for what you actually use)
- Predictive models offer insurance before you realize you need it
5. Regulation will standardize around consumer protection frameworks
- Federal guidance on embedded insurance (possibly federal insurance regulation)
- Standard disclosure requirements across states
- Consumer rights codified (right to cancel, right to compare, right to independent claims handling)
Opportunities for Innovation
Where embedded insurance is heading next:
Health and wellness: Fitness apps offering injury insurance, health monitoring devices offering diagnostics coverage
Climate and parametric: Weather apps offering parametric weather insurance, solar installers offering performance guarantees
Crypto and digital assets: Wallet providers offering theft/hack insurance, DeFi platforms offering smart contract insurance
Real-time adjustable coverage: Insurance that adjusts based on actual risk exposure moment-by-moment
Community and peer insurance: Embedded insurance funded by communities or peer groups rather than traditional carriers
How to Prepare for the Embedded Insurance Future
For Insurance Professionals
1. Embrace the shift, don't fight it
- Embedded insurance is inevitable; adapt your business model rather than resisting
2. Partner with platforms
- Identify platforms serving your target customers and propose embedded insurance partnerships
3. Focus on value-added services
- Risk management consulting, claims advocacy, complex coverage design are hard to embed
4. Build digital capabilities
- Customers expect seamless digital experiences whether coverage is embedded or not
5. Specialize in complex risks
- Simple insurance is moving to embedded channels; build expertise in complex risks that require human expertise
For Businesses Considering Offering Embedded Insurance
1. Start with customer needs
- What insurance do your customers need related to your product/service?
- Are they currently buying it elsewhere? Is it expensive or difficult to get?
2. Evaluate partnerships
- Work with embedded insurance platforms (Sure, Boost, etc.) rather than building from scratch
- Partner with insurers who understand embedded distribution
3. Test and iterate
- Start small (single product, single coverage type, limited rollout)
- Measure conversion, customer satisfaction, claims experience
- Iterate based on data
4. Prioritize customer experience
- Make insurance easy to understand and purchase
- Don't use dark patterns or manipulative tactics (damages trust and attracts regulatory scrutiny)
- Handle claims fairly and quickly
5. Understand regulatory requirements
- Work with insurance counsel to ensure compliance
- Don't assume traditional insurance regulations don't apply to embedded models
For Consumers
1. Understand what you're buying
- Read coverage details, even for simple embedded insurance
- Know what's covered, what's excluded, claim process, cancellation rights
2. Compare to alternatives
- Embedded insurance may not be the cheapest option
- Compare to standalone policies or credit card coverage
3. Avoid over-insuring
- Just because insurance is offered doesn't mean you need it
- Consider your existing coverage (homeowners, auto, credit card protections may already cover)
4. Take advantage of convenience when it makes sense
- For small purchases or infrequent needs, embedded insurance can be ideal
- For large purchases or ongoing needs, traditional insurance may offer better value
The Bottom Line: Embedded Insurance Is Here to Stay
Embedded insurance represents the biggest shift in insurance distribution since the internet enabled direct-to-consumer sales in the 1990s. It's not a niche trend—it's becoming the primary way consumers and small businesses buy insurance.
The drivers are compelling:
- Better customer experience (insurance offered when and where you need it)
- Better economics (higher conversion rates, lower customer acquisition costs)
- Better data (enables superior underwriting and pricing)
The winners will be:
- Distribution platforms that embed insurance to add value and revenue
- Insurers that partner effectively with platforms
- Technology companies that enable embedded insurance infrastructure
- Agents/brokers who adapt by focusing on complex risks and high-value relationships
The losers will be:
- Insurers that ignore embedded distribution and lose simple product sales
- Agents/brokers that rely solely on simple product sales without adding value
- Companies that resist change and cling to outdated distribution models
For consumers, embedded insurance means more convenient access to coverage, often at competitive prices—but also requires vigilance to ensure you're buying coverage you actually need and understand.
The embedded insurance revolution is underway. The question isn't whether it will transform insurance distribution—it's whether you'll be part of the transformation or left behind by it.
Navigating the evolving insurance landscape? As embedded insurance and traditional distribution coexist, understanding which coverage options best fit your needs requires expertise. Whether you're a business exploring embedded insurance offerings or a consumer comparing coverage options, working with knowledgeable professionals helps ensure you get the protection you need with the experience you deserve.
Sources: Bain & Company Embedded Insurance Report 2025, McKinsey Insurance Practice, Insurance Information Institute, National Association of Insurance Commissioners