Embedded insurance
Selling cover at the precise moment the need arises, built into another purchase journey rather than through an insurance brand.
Tesla launched motor insurance in California in August 2019, sold inside its own purchase journey and written on a third-party carrier's paper. That move is embedded insurance in a nutshell: the cover sits within a transaction that already exists, a loan, a car, a ticket, a pet, instead of pulling the customer toward a standalone insurance brand. The risk carrier steps back behind the platform, and the tech spend goes on plugging into the point of sale via API rather than on buying traffic. After 2022, once direct sellers had to account for the advertising acquisition costs that had dragged them down, the model became, alongside the MGA, one of the two routes left open to insurtech. The platform keeps the customer relationship, and charges for it.
Hypothetical case: an e-commerce site offers, at the moment of payment, breakage insurance backed by a partner insurer, embedded in the purchase journey without redirecting to an insurance brand.
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