Closing the Protection Gap: How Embedded Insurance in Vertical SaaS Platforms Can Help Address Europe’s SME Underinsurance Challenge

Small and medium-sized enterprises (SMEs) are the foundation of Europe’s economy. They account for 99.8% of all businesses across the region, employ nearly 90 million people, and contribute approximately €5.4 trillion in value added each year.

Despite their economic importance, underinsurance remains a persistent challenge across the SME segment.

Over the past decade, significant attention has been given to improving access to protection through product innovation, digitalization, and new distribution channels. Yet the protection gap continues to exist, raising important questions for insurers, brokers, MGAs, software providers, and the wider insurance ecosystem.

As SMEs increasingly adopt digital platforms to manage core business operations, a new opportunity is beginning to emerge. The software ecosystems that businesses rely on every day are becoming increasingly influential in how products and services are discovered, evaluated, and purchased. This shift has prompted growing interest in the role that embedded insurance could play in expanding access to protection for underserved business segments.

To explore this topic further, discovermarket has published a new whitepaper:

Closing the Protection Gap: How Embedded Insurance in Vertical SaaS Platforms Can Help Address Europe’s SME Underinsurance Challenge.

The report examines the scale of SME underinsurance across Europe and explores the structural factors that continue to limit insurance adoption among small businesses. It also investigates how changing customer behaviours, evolving digital ecosystems, and the growing presence of vertical SaaS platforms are creating new opportunities for insurance distribution.

Rather than focusing solely on insurance products themselves, the research considers a broader question: how can protection become more accessible within the digital environments where SMEs already manage their businesses?

The report explores:

• The scale and implications of SME underinsurance across Europe
• Key factors contributing to the protection gap
• The evolution of embedded insurance distribution models
• The growing role of vertical SaaS platforms in SME ecosystems
• Emerging opportunities for insurers, brokers, MGAs, and software providers
• Considerations for bringing embedded insurance programs to market

The research also includes industry perspectives from leaders across the insurance ecosystem, providing additional insight into how distribution models may continue to evolve in the years ahead.

As digital platforms become increasingly embedded within everyday business operations, understanding how protection can be delivered more effectively through these ecosystems is becoming an important strategic consideration for many market participants.

We hope this research contributes to the broader industry conversation around improving access to protection for Europe’s SME economy and supporting the long-term resilience of the businesses that power it.

Download the full whitepaper here to explore the findings and opportunities in greater detail.