 | With over 25 years of operational and advisory insurance experience, Yuri Poletto leads the Open and Embedded Insurance Observatory and co-leads the Cyber Insurance Frontier, member-led, executive communities focused on the evolution of insurance distribution, ecosystems, and cyber risk within regulated markets. Both initiatives convene senior leaders from across the global value chain - including insurers, brokers, tech providers, and non-insurance brands - to shape forward-looking strategies. These communities host executive plenary sessions, workshops, strategic roundtables, and research initiatives across Europe, North America, and Asia, helping market leaders navigate complexity with better-informed strategic decisions. |
Paul Carroll
Travel insurance has long been a great example of how insurance can be embedded into another process, especially buying plane tickets, but embedded insurance is moving far beyond that. What are your favorite more recent examples?
Yuri Poletto
One of the most interesting and inspiring recent examples of embedded insurance involves a Brazilian fintech called NuBank. NuBank launched an embedded life insurance proposition and achieved remarkable sales. What's particularly interesting to me is that nearly 50% of the buyers of this life insurance were first-time insurance buyers.
This is a remarkable example of how embedded insurance is not only about seamless distribution and innovation but is effectively a way to grow the market, enlarge the pie, and reduce underinsurance—which is an issue in every part of the world.
They sold 2 million policies in just a few years, and, as I said, nearly half went to first-time buyers of life insurance.
In hearing care, a global leader in this niche provides hearing aids and comprehensive auditory services. They have been a pioneer in the space, offering embedded insurance since 2014. Today, over 200,000 of their clients in Europe protect their hearing aids through these integrated policies, ensuring peace of mind for a critical and expensive medical device.
Embedded insurance is repositioning itself from a distribution efficiency model into a model that can create markets.
Paul Carroll
Where do you see embedded insurance breaking out in the next few years?
Yuri Poletto
I see several areas. Some of these opportunities are led by digitalization of markets. For example, home insurance and households is an area where we already see some activity, but we'll see much more thanks to the growth of proptech platforms. They see embedded insurance as a clear opportunity to gain additional margins.
Telcos, particularly in Europe, are increasing their commitment with embedded insurance. In this case, they’re driven by competition. They're suffering because of low-cost competitors, so it becomes fundamental for them to retain customers, and selling embedded insurance is probably the best way to increase their chances.
Similar dynamics apply to auto insurance. We know that car manufacturers and dealers basically don't gain margins from selling the cars, but they gain margins from services. Insurance, after-sales services, extended warranties, and maintenance are a fundamental part of this.
Another area for growth is the gig economy. Today, there are niche providers of embedded insurance for the gig economy. I think we'll see more in the future because the gig economy is huge. In the U.S., nearly 40% of workers are freelancers, and they don't have access to insurance for their freelance work.
Cyber, for me, is one of the largest opportunities for embedded insurance because attaching cybersecurity and cyber protection tools has proved to be the most effective way to sell cyber insurance.
I think we'll see lots of evolution in embedded insurance and many areas of growth.
Paul Carroll
Embedded insurance makes sense because it reaches people when they're already thinking about potential risks, but one significant concern is customer ownership. If a bank offers life insurance to its customers, who ultimately owns that customer relationship—the bank or the insurer? If it's the bank, doesn't that put the insurer at risk of being replaced at any time?
Yuri Poletto
It’s a critical question, Paul, and frankly, the one that keeps legal teams up at night during the implementation phase. In the U.S., the hurdle isn't just "who owns the customer" but "who holds the license." Because insurance is regulated at the state level, scaling a national embedded program across over 50 jurisdictions requires a sophisticated licensing strategy. Often, the answer lies in the MGA model. By using an MGA structure, the partners can clearly define customer ownership and data rights in the contract while ensuring that the entity facing the customer, whether it’s a tech platform or a bank, is operating within the strict boundaries of state licensing laws.
The relative strength of the partners is also important. Insurers are used to being the "big guy," but when they partner with a Big Tech firm or a major retailer, they are meeting an equal. The smart way to solve this is through modular compliance: building a tech stack that can handle different regulatory requirements state-by-state, so the insurer can remain the "manufacturer" while the distributor owns the "experience" without the insurer fearing they are becoming an interchangeable utility.
We see massive volumes of this working in Europe and Asia, and it's happening in North America, too. The compliant paths exist; it’s just a matter of designing the legal and licensing "plumbing" as carefully as we design the user interface.
It can be done.
Paul Carroll
People generally don't like to buy insurance, so they would prefer to purchase one comprehensive policy to cover everything. However, with embedded insurance, consumers are being offered individual policies when purchasing specific items like expensive watches or jewelry. What is your view on the tension between these individual policies for specific purchases and the idea of an overarching policy that would cover everything?
Yuri Poletto
That's a good point. I see it this way: Embedded insurance isn't a replacement for traditional distribution, it’s an expansion of the market. It "enlarges the pie" by reaching customers exactly at the point of need, often during significant life milestones or transactions where insurance might otherwise be an afterthought.
For example, many SMEs are chronically underinsured because the traditional broker model often struggles to efficiently handle complex risks when premiums and commissions are low. Embedded solutions bridge that gap by automating the process within the software SMEs use to run their business.
Furthermore, in the home insurance market where the comprehensive policy model is the standard, we can now integrate coverage directly into the mortgage closing process, a home maintenance subscription, or the moment a tenant signs a lease. This context-driven approach makes protection a natural extension of the purchase rather than a separate, secondary chore. Even the most comprehensive homeowners or renters policies have blind spots, like coverage limits on high-value jewelry, specialized electronics, or specific liabilities related to remote work. Embedded insurance also serves as a vital complement here, filling the gaps that a "one-size-fits-all" policy misses.
Ultimately, it isn't a battle of "one policy versus many." It’s about utility. If a customer finds a bundled policy more convenient and in line with their needs, they’ll choose it. But when a frictionless, point-of-need offer provides targeted protection, that is where the market truly grows. In the end, the most frictionless customer experience will prevail.
Paul Carroll
Back-of-the-envelope calculations suggest embedded insurance can save 15% to 25% of the first year premium on policies like life insurance by engaging customers already active in another environment. What other numbers best demonstrate the effectiveness of embedded insurance?
Yuri Poletto
This is one of the big selling points of embedded insurance, the fact that the distribution chain is simpler, with fewer intermediaries, resulting in lower commissions and lower costs for end customers. Sometimes it's true, but other times it's not. Particularly in the past, before there was more attention around this issue, B2B2C affinity insurance was sometimes sold with commissions of 70% or 80%, which didn't make it any cheaper than insurance purchased through another channel.
I have seen significant savings in commercial lines in the U.K., for example, where embedded insurance sold through SaaS companies achieved savings of up to 40% in price. I don't have particular numbers for personal lines, but I can speak to commercial lines because I've worked directly with one of the members of the observatory in the U.K.
The theory and the model are sound—once you're dealing with a brand that already has a customer base and you manage to set up a commercial agreement that works well and is streamlined, you can definitely achieve significant savings. Obviously, if you charge huge commissions, you eat into all those savings.
But I see the market moving toward more transparent settings and lower commissions. We've also seen some cases where prices are reduced thanks to profit sharing with customers.
Paul Carroll
Technology clearly has enabled embedded insurance. Is it now as good as it needs to be, or can we expect meaningful improvements as technology continues to advance?
Yuri Poletto
Unlike in the past, the technology for embedded insurance is mostly available today. It's no longer niche and super expensive, but mainly commodity. So the issue is not so much the availability of technology but the fact that often organizations prefer to try to build the technology internally rather than using technology that has been developed by specialists. This is a bit of a blocker.
APIs, obviously, are the key kind of technology when we talk about integration of insurance in non-insurance flows. There are a lot of enabler companies that provide these kinds of insurance services. We are already seeing a consolidation from the vendor standpoint, and we probably will see more now that capital is no longer cheap, because many enablers rely on venture capital.
Paul Carroll
This is all super-insightful. Thanks, Yuri.
