Insurance Is Included? The Rise of Embedded Coverage
Insurance is quietly evolving — not through new policies or regulations, but through how it reaches customers. The idea of “included insurance” — a catch-all term for embedded, affinity, and payment protection insurance (PPI) — represents one of the most significant shifts in distribution the industry has seen in decades. From airlines offering instant travel coverage to banks bundling mobile phone insurance, embedded insurance has transformed from a novelty to a multi-billion-dollar ecosystem projected to reach up to $850 billion within the next five years.
Embedded Insurance: Seamless, Convenient, and Everywhere
Embedded insurance refers to coverage integrated directly into the purchase process — whether it’s a flight, an e-bike, or even a Tesla. Instead of searching for an insurer after a purchase, customers simply tick a box at checkout. This convenience has made embedded coverage one of the fastest-growing segments in insurance, outperforming traditional sales channels.
But the growth isn’t just about convenience. Embedded insurance solves one of the industry’s oldest problems: underinsurance. Many consumers delay or avoid buying coverage, leaving them exposed in the interim. By baking protection into the transaction, embedded offerings close that gap — and for insurers, every missed policy becomes a missed opportunity to deploy capital.
Beyond Travel: From Teslas to Ubers and Monzo Banks
The concept extends far beyond travel insurance. Tesla’s in-house insurance model is a case study in how embedded products can address service gaps. Traditional carriers struggled to price electric cars due to their unique risks, so Tesla built its own insurance ecosystem — using real-time driving data to adjust premiums dynamically.
Similarly, Uber introduced insurance options for its gig drivers, addressing a key liability hole: personal auto policies don’t cover commercial ridesharing. While Uber’s motives spark debate — balancing driver protection with corporate profit — the model shows how embedded coverage can redefine responsibility between platforms and users.
Financial platforms are entering the game too. UK fintech Monzo now includes mobile phone insurance for its premium users, not as a regulatory necessity, but as a customer incentive. This highlights embedded insurance’s dual role: not only as a safety net, but as a marketing and retention tool.
The Psychology of Trust and Convenience
A major driver behind embedded insurance’s popularity is trust. Consumers are more likely to buy protection from brands they already interact with — Amazon, Apple, Uber — rather than from an unfamiliar insurer. This is the psychology behind AppleCare’s success: when the brand offering protection is also the one delivering the product, the insurance feels like a promise, not an upsell.
Embedded coverage also aligns with modern expectations of frictionless purchasing. As host Kaspar Harsaae noted in the episode, “Insurance can feel like a hassle — but if it’s just ticking a box and paying a little extra, people are happy to do it.” The result? A win-win for both insurers and customers.
Where It’s Headed: AI and the Future of Embedded Risk
Looking forward, AI-driven personalization is set to reshape how embedded insurance is priced and delivered. As Harsh Chandnani pointed out during the discussion, advanced data modeling could enable insurers to tailor micro-policies based on individual behavior and context — from travel habits to device usage. The collaboration between traditional insurers and insurtechs will be key in powering these next-generation solutions, ensuring they integrate seamlessly into the customer experience.
The possibilities are limitless. From e-bike warranties to restaurant reservation guarantees, embedded insurance could soon cover everyday inconveniences that previously went uninsured — a future where protection is not an add-on, but an assumed part of every transaction.
Listen into the conversation on the Coverage & Coffee Podcast to learn more!
