What is embedded insurance? Strategy Guide for 2025

Understanding embedded insurance

In its simplest form, embedded insurance is a way of offering insurance digitally as a featured option at the moment of need. When implemented correctly, true embedded insurance creates a seamless, integrated experience where bindable insurance quotes are offered to customers within the existing buying experience.

For example, if a customer is buying a car online and getting financing through the financial services arm of the manufacturer, the dealership already has all the information they need (name, address, age, FICO score, etc.) to offer an auto insurance quote. Rather than making the customer enter all this data again, true embedded insurance pulls this information programmatically, underwrites a bindable quote, and lets the customer complete the purchase—all within the same online experience.

Embedded insurance benefits

When configured correctly, embedded insurance creates benefits for consumers, brands, and the insurance carriers.

Customers

Seamless experience

Insurance is offered exactly when needed (the point of need) without disrupting the customer journey.

Contextual relevance

Insurance products offered relate to what the customer is doing or buying.

Consumer Brands

Customer retention

Strengthen relationships by keeping customers in your ecosystem while providing the convenience they value.

Recurring revenue

Unlock new revenue streams.

Insurance Carriers

Expanded distribution

Access to new customers through trusted brands.

Reduced fraud

Customers coming from brand partnerships are pre-verified since most brands perform Know Your Customer (KYC) checks. Lower fraud equals lower risks, which means better commercial performance.

Phony embedded insurance solutions

With embedded insurance becoming a hot trend, many companies are jumping on the bandwagon and labeling their technology as "embedded insurance" when it’s not and they can’t deliver the true benefits.

The most common form to watch out for is when the “technology company” recommends placing a CTA button on the brand's website that takes customers away from your website experience to a third-party landing page or aggregator site.

We’ll walk through both of these options and explain why we don’t recommend them.

Carrier-direct landing page model

Users are redirected from your brand's website to a third-party landing page promoting a specific insurance carrier.

A consumer completes the car buying process online when they’re served with a “save on car insurance” message.

After entering their zip code, they’re redirected to another page to enter their information manually and are matched with an insurance carrier.

After hitting continue, they are sent to the final page on the carrier's website to review their information once again and submit to get a quote.

There are three problems with this approach:

Bad customer experience

Asking your customers to take numerous steps outside of your normal brand experience to get a policy quote.

Old-fashioned process

The insurance company sees your customer as a stranger off the street. Since they don't know them and need to verify their information, it will take longer to get a policy quote.

No longer your customer

You're selling your customer to the insurance carrier for an upfront commission fee. The carrier gains ownership of the relationship and all future revenue from cross-sells, upsells, and renewals.

Aggregator model

Users are redirected from your brand's site to a third-party website with multiple insurance options to review – think Kayak but for insurance.

A consumer completes the car buying process online when they’re served with a “save on car insurance” message.

After hitting the “Get My Rates” CTA, they’re redirected to a third-party aggregator site and are instructed to enter their information manually.

After entering their information, they’re shown multiple insurance options.

There are two problems with this approach:

Analysis paralysis

Customers often feel overwhelmed when faced with too many options. By offering numerous options, you're shifting the burden and turning them into an insurance researcher, instead of a buyer.

Breaking the core conversion

Faced with too many options, most customers will pause their purchase to research coverage in different places. When ready to buy, they'll purchase directly from carriers – not the aggregator site. You lose the attribution and the commission fee.

Both of these approaches are the exact opposite of truly embedded insurance. You’re sending consumers away from your experience to a different website, where you have no idea what's gonna happen with that customer.

Think of the difference this way: If you're at McDonald's ordering a meal and they ask if you want fries with that, that's embedded – they add it to your order. If they told you to walk two blocks to a separate store to buy fries, that would be a link-out solution. Not helpful, right?

Determining if embedded insurance is right for you

To figure out if your brand should offer embedded insurance, start by answering these two questions:

Does your primary product require insurance or is insurance a nice-to-have addition?
Can you offer relevant insurance either alongside your core product or as an ancillary benefit?

Not every brand needs to offer insurance, but many could benefit significantly from it. The key is understanding your customer relationship and what they expect from your brand.

First, let’s dive into the difference between required insurance vs. nice-to-have.

What is required insurance vs. nice-to-have insurance?

Required insurance

Customers must obtain this insurance to complete their primary transaction. A few examples are:

You must have auto insurance when buying a car
You must have homeowners insurance when getting a mortgage
Small businesses must have general liability insurance to lease a space
Restaurants must have liquor liability insurance if they want to sell alcohol
Retailers must have product liability insurance to sell on Amazon

Tip: For required insurance, customers will seek it out regardless, but if you offer a frictionless way to get it, they'll choose your solution for convenience.

Nice-to-have insurance

This is the world of optional but beneficial protection. A few examples are:

Airline offering travel insurance when selling airline tickets
A business offering extended warranty for products they sell online or in-store
Identity theft protection with financial services
Personal cyber insurance

Tip: For nice-to-have insurance, the easier you make it to purchase, the more likely customers will add it –but if there's significant friction, they'll simply skip it.

Offering relevant embedded insurance products

After mapping your product to the correct insurance category (required vs. nice-to-have), the next step is to understand your customers.

Ask yourself:

What are customers expecting from our brand?
Is there a relevant insurance product we can offer that is complementary to what customers are buying from us?

Let's look at a few industry use cases.

Restaurants

McDonald's probably shouldn't offer life insurance with every Big Mac, but they should offer general liability to the franchisees.

eCommerce

Amazon tried selling homeowners insurance but it didn't work because people weren’t expecting that from them. However, Amazon found success offering small business insurance to the third party merchants.

Banking

Life insurance is not required but as families buy houses they start planning for the future. Banks should offer life insurance since they already have a relationship as a trusted advisor. If someone trusts you with your mortgage or financial investments, why wouldn't they trust you with life insurance?

EVs

Car manufacturers should sell auto insurance, especially for EVs. Many insurance carriers are hesitant to cover electric vehicles which creates a barrier for potential buyers. By offering insurance options, EV companies can eliminate this obstacle and make EVs more accessible.

Common embedded insurance challenges

The biggest challenge to creating integrated embedded insurance experiences is having the right technology.

There are essentially three options: Partnering directly with a carrier, building your own solution, or working with an embedded insurance platform. Let's review the pros and cons of each approach.

Partner directly with a carrier

Pros

Potential for deeper integration with a single carrier
Direct relationship with the underwriter

Cons

Reliant on the carrier's technology capabilities (which isn't their core strength)
Carrier systems and APIs are often outdated and don’t receive regular updates
Limited to that carrier's insurance products and geographic coverage
Vulnerable if the carrier decides to change strategy or turn off access
Must build a customer facing website to integrate with the carrier’s API

Summary

The reality is straightforward. Insurance carriers are great at understanding and underwriting risk. However, they lack the expertise in building sophisticated technology platforms and APIs.
And, no single carrier has the appetite for all risk profiles nationwide. So, consumer brands often have to work with multiple carriers to sell their customers digital insurance nationwide.
Going this route, you will still need to build your own platform to manage multiple carrier relationships and maintain the various APIs – all while ensuring a seamless customer experience.

Build your own insurance program and platform

Pros

Complete control over the user experience
Ownership of all data

Cons

Takes significantly longer to implement (often 3+ years from concept to launch)
Extremely resource-intensive (time, money, expertise)
Requires insurance knowledge to navigate regulatory requirements across 50 states
Needs ongoing maintenance and carrier relationship management
Diverts resources from your core business

Summary

Building your own platform requires considerable upfront investment of money and resources. This route typically takes years to launch and diverts significant resources from your brand's core business.
Beyond the platform itself, your brand will need specialized insurance expertise – including knowledge of state-by-state compliance regulations, product pricing strategies, and claims management.
Setting up effective claims intake and routing processes is crucial, as customers judge insurance primarily on their claims experience, not the purchase process. When claims aren't handled smoothly, customers won’t blame the insurance carrier – they’ll blame your brand directly, impacting your brand’s reputation negatively.

Partner with an embedded insurance platform

Pros

Pre-built technology designed specifically for insurance integration
Multi-carrier access for nationwide and / or global coverage
Insurance carrier agnostic
Regulatory expertise and existing licenses
Faster time to market (often 60 days or less vs. 1-2 years)
Ongoing innovation and support
Allows you to focus on your core business

Cons

Navigating the market of find the right partner to work with

Summary

The platform partnership model is clearly the best option when it comes to speed, expertise, and resource efficiency for most consumer brands. However, not all platforms are created equal, and evaluating potential partners requires a systematic approach. The following checklist will help you identify a platform that can deliver the specific capabilities you require.

How to build a successful embedded insurance strategy

Digital embedded insurance represents a great opportunity for consumer brands to enhance customer experience, deepen relationships, and generate new revenue streams. To build a successful embedded insurance program and avoid common challenges, follow these three principles:

Put customers first

It’s critical to understand what customers expect from your brand so you can offer relevant insurance at the right time without unnecessary friction. The most successful programs make the experience feel like a natural extension of the purchase, not an interruption.

Plan thoroughly

Understand your goals, resources, budget, and timeline before starting. This clarity will not only help identify the right partner but set expectations.

Find the right partner

Finding a partner with the right capabilities is key to getting your brand’s embedded insurance program off the ground. The right technology partner must be able to bring together expertise, technology and distribution – not multiple vendors put together with duct tape.

Why Sure is the best embedded insurance platform

Sure is the leading technology platform that connects consumer brands with carriers, so brands can seamlessly offer insurance, while insurance carriers handle the risk assessment and get alternative distribution.

Sure is leading the charge in partnership with popular consumer brands offering embedded insurance programs to their loyal customers.

We’re the choice for you if you are looking for:

Speed to market

Launch enterprise digital insurance programs within 60 days, while SMBs programs can go live in just 24 hours.

Carrier flexibility

Tap into our network of insurance carriers and products or onboard the current carrier you're working with onto the platform.

Seamless experience

Maintain the brand experience by integrating products into existing customer purchase flows.

System of record

Ability to access permissioned customer data at any time.

Reporting capabilities

Provide robust analytics and reporting tools to give you visibility into program performance.

Proven track record

Successfully launched embedded insurance programs for fortune 500 consumer-trusted brands.

Reliable and secure

Our platform exceeds industry security standards with proper certifications for data protection, disaster recovery, and system reliability.

Interested to learn more about Sure? Read about our proven digital insurance launch plan.

What is embedded insurance?

Understanding embedded insurance

Embedded insurance benefits

Customers

Consumer Brands

Insurance Carriers

Phony embedded insurance solutions

Carrier-direct landing page model

Aggregator model

Determining if embedded insurance is right for you

What is required insurance vs. nice-to-have insurance?

Offering relevant embedded insurance products

Common embedded insurance challenges

Partner directly with a carrier

Build your own insurance program and platform

Partner with an embedded insurance platform

How to build a successful embedded insurance strategy

Why Sure is the best embedded insurance platform

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