March 30, 2025
Embedded insurance is transforming how coverage is offered - integrating it directly into purchases like cars, furniture, or travel plans. By 2026, advancements in API technology, no-code tools, and consumer preferences will drive this market to grow at a 35.14% annual rate, reaching $703.44 billion by 2029. Key takeaways:
Embedded insurance offers tailored, seamless solutions for modern consumers. Businesses that act now can capitalize on this shift. Read on to learn how APIs, partnerships, and customer-centric design are reshaping the industry.
API technology has reshaped how insurance products are integrated into digital platforms, offering smoother experiences for businesses and customers alike. By 2028, over 30% of insurance transactions will rely on API-driven integration, signaling a major change in how coverage is distributed and managed [5].
Insurance APIs allow real-time communication between insurance services and business platforms. They handle tasks like policy management, claims processing, and premium calculations, all while maintaining strict security and compliance standards [4].
Some notable examples include:
These partnerships highlight how APIs are improving functionality and accessibility in the insurance sector.
"The insurance industry, once known for its paper trails and isolated systems, is undergoing a digital revolution. Insurance APIs are leading the charge, enabling seamless data exchange and integration between different systems. Imagine APIs as translators, allowing applications to communicate." - Mayur Upadhyaya, CEO at APIContext [4]
Modern insurance APIs come with essential features that improve both business efficiency and customer satisfaction:
| Feature | Benefit | Customer Impact |
|---|---|---|
| Real-time Data Exchange | Instant updates for policies and pricing | Immediate confirmation of coverage |
| Automated Underwriting | Faster processing of applications | Quicker approvals |
| Security Protocols | Safe handling of sensitive data | Builds trust and ensures privacy |
| Compliance Automation | Simplifies regulatory adherence | Provides legal assurance |
These features are driving market growth. Embedded property and casualty (P&C) insurance sales in the U.S. are projected to hit $70 billion in premiums by 2030 [5].
A real-world example of successful API integration is the partnership between ADT and Hippo Insurance. This collaboration demonstrates how APIs can streamline operations while advancing the shift toward digitized insurance solutions. Key benefits include:
"This data exchange benefits both insurers and customers. Customers experience a more streamlined experience, obtaining quotes or filing claims through user-friendly mobile apps, eliminating the need for lengthy calls or paperwork. Streamlined data exchange also enhances operational efficiency for insurers by reducing manual work and errors, saving time and resources." - Mayur Upadhyaya, CEO at APIContext [4]
This example shows how API-driven solutions simplify complex insurance processes and deliver value to all parties involved. Future advancements are likely to include AI for better risk assessment and IoT devices for usage-based insurance models [4].
With the rise of API-driven solutions, no-code platforms are making it even easier to manage insurance integration. These platforms are expected to automate up to 60% of claims processes by 2026, transforming how insurance companies operate [8].
No-code insurance platforms allow businesses to create and update insurance solutions without needing coding skills. Using drag-and-drop tools, companies can quickly build and customize insurance products. Studies reveal that no-code platforms can reduce development time and costs by over 90%. They also help modernize outdated systems, which often come with 58% higher IT costs and 43% higher operating expenses [8].
Using no-code tools for insurance integration offers several clear advantages:
| Benefit | Impact | Business Outcome |
|---|---|---|
| Rapid Deployment | Launch insurance products in under 24 hours | Faster time to market |
| Cost Efficiency | 90% reduction in development costs | Better return on investment (ROI) |
| Process Automation | Automates up to 60% of claims processes | Improved operational efficiency |
| Scalability | Easily adapts to business growth | Prepares for future expansion |
"Agility, speed to market and lower costs are the three key pillars to succeeding in today's fast-moving, competitive insurance landscape, and low-code/no-code can help with all of them."
Neo Financial teamed up with Walnut to integrate no-code insurance solutions into its platform. This partnership allowed Neo Financial to offer credit card insurance options like extended warranties, rental insurance, and purchase protection. They also introduced premium plans that include mobile phone protection, life insurance, and health and wellness benefits [6].
"We're excited to partner with Walnut, bringing insurance into the digital age and creating greater access to protection for all Canadians. We've been impressed with how their infrastructure has been able to support us in growing our product offering."
- Andrew Chau, Co-founder & CEO, Neo Financial [6]
Placing insurance options at the right moments in a customer's journey is key to increasing adoption and creating a smooth experience. Studies show that 71% of digital bank customers are open to embedded insurance offers when presented at the right time [9]. For example, offering vehicle insurance at the end of a car financing process or providing travel insurance while confirming travel plans are natural opportunities. These well-timed offers not only catch the customer’s attention but also pave the way for more tailored, data-driven solutions.
Modern embedded insurance platforms rely on customer data to recommend coverage that fits individual needs. By analyzing factors like buying habits, demographics, and behavior, insurers can suggest products that feel more relevant. A great example is Toyota’s collaboration with Nationwide, which uses driving data to offer personalized premium discounts. This approach aligns with what today’s consumers expect - solutions that feel designed just for them [9].
"Personalised embedded insurance brings the product to the consumer, at the exact point of purchase, rather than expecting the consumer to seek it out. This integration is designed to close coverage gaps by recommending personalised products precisely when and where they are most relevant."
– Andy Watts, Business Development Director, INSTANDA [1]
Embedding insurance into the customer journey doesn’t just boost immediate sales - it can also improve long-term loyalty. Case studies from industries like digital banking, travel, and automotive show that seamlessly integrated insurance options increase overall satisfaction and encourage repeat business. By providing personalized coverage at key moments, companies can build stronger relationships with their customers and keep them coming back.
As digital systems become more ingrained in the insurance industry, ensuring compliance and safeguarding data are critical for embedded insurance operations. By 2026, regulatory requirements for embedded insurance are expected to grow more intricate. Companies must obtain state-specific licenses, each with its own set of rules. The way compensation is handled depends on licensing: licensed producers have more flexibility, while non-licensed entities face stricter boundaries. Additionally, anti-rebating laws prohibit offering unquoted incentives [10].
The rising costs of data breaches [12] highlight the importance of strong security measures. Embedded insurance platforms must facilitate secure data sharing between all stakeholders [13].
Some key security practices include:
"Cyber risks increase exponentially when insurers rely on outdated operating systems and unsupported software which limit their ability to create intuitive solutions without creating bottlenecks or disruptions within digital ecosystems."
– Shreyas C Vasanthkumar, Managing Director – EMEA at Duck Creek Technologies [13]
These practices are especially critical for API and no-code platforms, which face unique compliance challenges.
New AI regulations are reshaping compliance standards for API and no-code tools. The EU's Artificial Intelligence Act introduces a risk-based system, while U.S. states like California focus on transparency in AI applications [11]. Singapore's Model AI Governance Framework strikes a balance between encouraging innovation and protecting consumers.
To stay compliant and ensure smooth integration, companies should prioritize transparent technology solutions and strengthen their data governance policies. Regular training and agile management practices can help them adapt to evolving regulatory landscapes [12].
Embedded insurance is transforming how earnings are generated, blending commission-based approaches with dynamic pricing models that adjust premiums based on customer behavior and data [1].
Here are two common revenue models:
Collaborations are changing the way insurance products are delivered to consumers. A great example is Tesla's 2019 launch of Tesla Insurance, which uses vehicle sensor data to determine pricing [14]. Similarly, Root Insurance's partnership with Carvana allows customers to buy both vehicles and insurance in one smooth transaction [14].
"Talking to consumers at the time when they really need insurance - like when they're purchasing a vehicle - is a lot better customer experience than being bombarded with advertisements to try to get somebody to a website [that describes] a product they're not very excited about in the first place."
– Alex Timm, Root Chief Executive Officer [14]
These partnerships not only improve customer experiences but also drive market growth, as reflected in future projections.
The embedded insurance market is on track for impressive expansion. Key forecasts highlight growth across various segments:
| Market Segment | Projected Value | Key Growth Drivers |
|---|---|---|
| Global P&C Market | $722 billion (by 2030) | Digital transformation, IoT usage |
| US Personal Auto | $50 billion | Connected vehicles, usage-based insurance |
| Overall Market (2029) | $703.44 billion | Tech adoption, evolving preferences |
By 2025, 90% of new U.S. vehicle sales are expected to be connected cars [3], creating major opportunities for embedded insurance. The market is growing at a compound annual rate of 35.14% [2], fueled by digital advancements, demand for seamless solutions, and connected technology.
This rapid growth means businesses adopting embedded insurance now are positioned to secure a strong foothold by 2026. In fact, Deloitte estimates that if 20% of the U.S. personal auto market shifts to embedded insurance by 2030, at least $50 billion in premiums could move away from traditional channels [14].
Embedded insurance is undergoing a major shift, driven by advancements in technology and changing consumer expectations. Predictions suggest that Property & Casualty (P&C) embedded insurance could generate $722 billion in Gross Written Premiums by 2030 [1].
Here are the three main factors driving this change:
"Personalised embedded insurance brings the product to the consumer, at the exact point of purchase, rather than expecting the consumer to seek it out" - Andy Watts, Business Development Director at INSTANDA [1]
These trends highlight opportunities for creating actionable strategies.
To stay ahead in this evolving landscape, businesses should focus on:
With a projected growth rate of 35% CAGR through 2029 [3], businesses that embrace embedded insurance now can secure a strong position in this expanding market. This shift isn’t just a passing trend - it’s a strategic move for thriving in the digital age.
