What is Embedded Insurance?

Embedded Insurance is a new way of collaborating and innovating with third party brands, of all types and sizes, to help them grow their businesses, create compelling new protection solutions for end customers and, ultimately, close protection gaps.

It exploits digital technology and data in new ways to create better underwriting models that improve customer experiences, marketing effectiveness, risk selection, pricing and unit economics.

Embedded Insurance is complementary to, but different from, current affinity and partnership programs in a number of ways:

  • Purpose: it’s focus is on enabling brands and their customers to access a broader set of diverse and customised solutions to problems, rather than on distributing existing risk transfer products from a single supplier.
  • Technology: it exploits a new type of infrastructure - ‘Operating Systems’ that can aggregate demand and orchestrate supply from multiple parties.
  • Skills: to be successful, it requires new capabilities in digital sales and marketing, data science, open platform development, as well as digital underwriting.
  • Monetisation: it combines Software-as-a-Service fees with recurring GWP and AuM revenue share.

​Embedded Insurance is part of the broader market trend of ‘Embedded Finance’ which is accelerating across all sectors due to four key factors:

  • 1. Technology sophistication:

    The ability of financial service capabilities and components to be modularised and abstracted into software formats, such that they can be accessed and creatively re-configured by third-party developers and non-financial product managers, quickly and cost-effectively.

  • 2. Increasing commercial demand:

    The pressure from digitisation on existing business models and the growing awareness among third party brands of the potential to use digital financial services to improve their value to customers and their own profitability. (Some brands, like Tesla, are looking to create their own insurance entities, to control the whole brand experience and retain all the economics).

  • 3. Growing societal need:

    Enormous and ever widening protection gaps (between what individuals and businesses have and need for financial wellness and resilience), exacerbated by changes in demographics, working patterns, climate and other new and more severe risks facing the world.

  • 4. Investors seeking safer returns:

    Investors seeking safer returns: Smart capital shifting to more sustainable ‘B2B infrastructure’ plays, away from more risky direct-to-consumer plays.

Following the report, the industry Peer Group set out a vision for Embedded Insurance, which is: “More and better protection baked into the everyday lives of everyone”.

Peer Group Members

iptiQ was one of the founder members of the industry Peer Group which was set up to explore the opportunities that Embedded Insurance can bring to end customers, the insurance industry, and the wider global economy from October 2021 to May 2022. Other Peer Group members included Allianz, Axa, Munich Re, Travelers, Google Cloud, American Family, Liberty Mutual, Marsh and IAG. The Peer Group was facilitated by Simon Torrance, Founder of Embedded Finance & Super App Strategies and Dawn LeBlanc, an insurance industry veteran and Managing Director of the Hartford Insurtech Hub.

The Peer Group was independently organised and facilitated by Simon Torrance, Founder of Embedded Finance & Super App Strategies and Dawn LeBlanc, an insurance industry veteran and Managing Director of the Hartford Insurtech Hub.

Download the report

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