Embedded insurance: What’s behind it?

Embedded insurance integrates insurance directly into products and services, simplifies the acquisition process and changes the traditional insurance landscape. The innovation is the seamless merging of product and insurance, which offers both customers and companies considerable advantages.

Digital transformation is increasingly influencing and changing the way companies deliver their products and services. 

One area that has undergone a remarkable transformation in recent years is the insurance industry. The term “embedded insurance” has emerged as a revolutionary concept. But what is behind this term and why is it gaining traction so quickly?

The Embedded Insurance: A brief overview

Embedded insurance refers to the integration of insurance products or services directly into the purchase or usage process of a primary product or service. Insurance is therefore a “besides product” that is purchased together with the main product.

This means that when, for example, a customer buys a car, the insurance is already integrated into the vehicle purchase process without the customer having to search for and take out car insurance separately.

The best example of embedded insurance is Apple Care. This service can be purchased with the sale of an Apple product. As soon as the iPhone or iPad is damaged, the consumer receives a new smartphone or tablet with Apple Care. And this is only because they have taken out insurance with AIG, one of the world’s largest insurers, when they purchase and take out Apple Care, without having to submit another insurance application or answer any questions.

Evolution: from the classic approach to invisible integration

The development of embedded insurance did not happen overnight. It required a change of the classic approach to adapt it with the current needs of consumers.

The attached diagram provides an excellent overview of the evolution of insurance products towards what we will know in the future as Symbiotic or Invisible Insurance:

For decades, customers had to buy insurance separately. In other words, they first bought a product and then looked for a suitable insurance policy for it separately. 

To avoid having to send the customer to the insurer, institutions have discovered cross-selling. This means that after purchasing the product, the customer is referred to an insurance specialist in the same company. The customer no longer needs to go to the broker, but can do this in the same store. However, the process of taking out insurance remains separate. 

Digitalization and the internet finally offered insurers further opportunities to bring their products to the customer. 

In the next iteration, insurance companies created so-called annex products, in which a certain product is sold together with an insurance policy. One example would be car sales, where the salesperson – who does not have to be an insurance specialist – not only sells the vehicle, but also the motor vehicle liability insurance. Despite the combination, there are two separate contracts and payment transactions.

And then embedded came into play. This is where the real integration begins. The insurance cover is now firmly integrated into the purchase process of the main product. There are still two contracts, but the purchase process is greatly simplified by simply ticking a box in the process or answering questions about the scope of cover. 

Tech giant Apple is the most prominent example of embedded insurance with its extended warranty and customer support service (Apple Care).

The next stage in the development of embedded insurance is the complete merging of the non-insurance product or service with the insurance component. Everything is combined in a single, seamless process, as ZERO already offers with its insurance solution. 

Airbnb, the online marketplace for booking and renting accommodation, integrates insurance into its booking process, which is not apparent to the customer at first glance and cannot be selected by the host. When booking, the customer does not realize that they have also taken out insurance for their stay – Embedded Insurance perfectly implemented.

Why is embedded insurance so attractive?

Customers benefit from the convenience and speed of embedded insurance. In a world where efficiency is crucial, integrated insurance cover significantly reduces the effort involved. The customer no longer needs to go to the assurer to insure their product.

For companies, the integration of additional services, such as insurance, into their products or services offers several advantages:

  • The extended value chain increases your own relevance for customers
  • The additional benefit of the products and services is perceived by customers, demonstrably increases long-term customer loyalty and reduces churn
  • An additional source of revenue is generated (even if this usually takes a back seat with embedded insurance)


Embedded insurance is not just a short-term trend. Cross-industry offerings and ecosystems reflect a changing landscape in which products, services and market segments are increasingly merging. This approach offers significant benefits for both companies and end consumers. ZERO is working to drive such innovative insurance solutions forward and establish the next level of embedded insurance.

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