A New Era of Insurance: Embedded Insurance

Embedded insurance is transforming how consumers access coverage – making it more convenient, personalized, and integrated into everyday purchases. With a projected market value in the trillions, businesses and insurers are embracing this trend. But what exactly is embedded insurance, and why is it growing so fast?

The modern insurance market is undergoing dynamic changes, and one of the most groundbreaking trends is the growth of embedded insurance. This innovative approach allows customers to obtain insurance coverage at the moment of purchasing a product or servicea, eliminating the need for a separate selection and purchase process. As a result, customers receive more tailored and convenient insurance options, while companies increase their revenue and customer loyalty.

How Does Embedded Insurance Work?

Embedded insurance is a model in which insurance is offered as an integral part of purchasing another good or service. Examples include travel insurance added to a flight ticket, electronics protection when buying a new smartphone, or an auto policy bundled with a car lease.

Key features of this model include:

• Seamless integration – insurance is available directly at the point of sale.

• Speed and convenience – no need to search the market and compare offers.

• Personalization – policies are tailored to the specific product and customer.

• Lower operational costs – automation of the sales and claims process reduces expenses.

Benefits for Companies and Consumers

With embedded insurance, customers can enjoy a higher level of protection and convenience. Insurers and partner companies, such as retailers, e-commerce platforms, and service providers, gain an additional revenue stream and improved customer engagement.

Market Research and Industry Insights

Recent market research indicates that consumer demand for embedded insurance is on the rise. According to a 2023 study by McKinsey & Company, more than 60% of consumers prefer purchasing insurance directly at the point of sale, as it simplifies the buying process and ensures immediate coverage.

Additionally, a report from Bain & Company predicts that by 2030, embedded insurance will account for over 30% of global insurance distribution, with Asia and North America leading the adoption. This surge is attributed to the growing digital transformation and the increasing role of e-commerce and fintech solutions in insurance delivery.

According to a report by InsTech London, the embedded insurance market was valued at approximately $3 trillion in 2022, and its value is expected to continue growing rapidly. Key areas of expansion include:

• Travel insurance – airlines and booking platforms offering automatic policies.

• E-commerce – protection for purchased products (e.g., smartphones, home appliances).

• Mobility – leasing, car-sharing, and auto insurance.

• Health – health and life insurance integrated into fitness apps.

Case Study: Decerto and the Embedded Insurance App for MediaMarkt

A successful example of embedded insurance implementation is Decerto, which developed a dedicated application for MediaMarkt. This app allows customers to quickly and conveniently add insurance coverage to purchased electronic products directly online. Decerto’s system integration enables automatic application processing, offer personalization, and a simplified claims process, significantly enhancing the customer experience. This solution not only increased policy sales but also strengthened customer loyalty to the MediaMarkt brand.

Challenges and the Future of Embedded Insurance

Despite its rapid growth, the embedded insurance sector faces challenges such as regulatory compliance, data protection, and the need to educate consumers about the scope of coverage. However, experts predict that in the coming years, this market will continue to expand, particularly driven by advancements in artificial intelligence and automation.

As a result, embedded insurance could become the standard, redefining how customers obtain insurance coverage and how companies deliver value to their customers.