17 Sep 2026
How can insurers use embedded insurance to open new distribution channels?
By Fernando Denes, Head of Growth and Partnerships | Updated 17 September 2026 | Estimated reading time: 8 mins
Part 1 of 2
Summary
Insurers can open new distribution channels by placing suitable insurance within the journeys that customers already use to bank, shop, travel, work or run a business. The insurer combines its underwriting capacity and product expertise with a partner’s customer relationship and connected processes for quotation, issuance, payment, servicing and claims.
Making the channel viable, however, requires more than adding a sales interface: the insurer must adapt its appetite, data, operating responsibilities and portfolio controls while retaining the accountability attached to its role as risk carrier and product manufacturer.
How does embedded insurance create a new channel for an insurer?
Embedded insurance changes where a customer encounters protection rather than creating a separate class of insurance. Instead of relying only on agents, brokers, comparison sites or the insurer’s own website, an insurer can distribute through a bank account, retailer, marketplace, mobility app, booking platform or business software product when the related risk is easy to recognise.
A large partner audience does not by itself create a valuable channel, because the product still needs to fit the customer, the moment and the partner’s ability to support the complete policy lifecycle. The channel should therefore be assessed as a product and operating decision, not simply as another place to display an offer.
A new channel is created when an insurer gains a repeatable route to an identifiable customer group through another organisation’s product or service journey. The distribution partner contributes access, context and customer interaction, while the insurer contributes insurance capacity, product design, pricing, policy terms and claims responsibility.
The offer may appear during a transaction, such as device protection at checkout, or within an ongoing relationship, such as cover linked to a bank account, subscription or software platform. Information from the main journey may support the offer where its use is lawful and transparent, although the customer must still understand the insurance and the parties involved.
EIOPA describes increasing use of APIs to automate insurance distribution through platforms where coverage is embedded alongside other financial and non-financial services. (EIOPA, 2023) Hosted journeys, widgets and software development kits can also support distribution.
Similar shifts are underway outside Europe. Brazil’s insurance and central bank regulators have established an Open Insurance framework enabling API-based data sharing between insurers and partners, while Singapore’s Monetary Authority maintains a public register of open APIs to encourage financial institutions to adopt open API architectures.
Which distribution channels can insurers enter?
The strongest possibilities combine an established customer relationship with a moment when a particular financial risk becomes visible. These examples are channel possibilities rather than a claim that every customer in the industry needs insurance.
| Partner channel | Existing journey and possible need | What the insurer must establish |
|---|---|---|
| Bank, fintech or payment platform | Account, card, lending or payment journey; life, purchase, travel or cyber-related protection | Whether the coverage fits the financial product and a defined target market |
| Retailer, marketplace or device provider | Checkout, delivery or subscription; damage, theft, breakdown or delivery cover | Whether the loss is meaningful and existing warranties or policies create duplication |
| Travel, ticketing or hospitality platform | Booking, payment or trip management; cancellation, disruption or medical cover | Whether the period, covered events and exclusions match the booking |
| Mobility or logistics platform | Rental, ride or delivery; accident, liability, excess, cargo or income protection | Which participant faces the risk and whether cover follows the relevant activity |
| Business software or SME platform | Payroll, invoicing or commerce; cyber, liability, equipment or receivables cover | Whether reliable information identifies the business and its exposure |
Examples include Chubb’s partnership with Nubank that launched in-app life insurance in Brazil before expanding to other coverages and markets, and Chubb’s partnership with Grab that embedded personal accident and other cover directly into the ride-hailing platform’s driver app across Southeast Asian markets. These reach customers through a financial relationship and a mobility platform respectively. (Chubb: Nubank Case Study; Chubb and Grab, 2018)
Which partners and products are suitable for an embedded channel?
The insurer should be able to describe the potential loss, who would suffer it, why the moment is relevant and how the policy would respond. It should then test whether the available data is sufficient to price and underwrite the risk, whether the journey could attract a materially different risk mix from existing channels, and whether the resulting exposure fits its capacity, reinsurance arrangements and concentration limits.
The partner needs more than traffic because it must present the product to the intended customers, explain its role and support agreed service and oversight information. The insurer should examine its customer profile, reputation, incentives and operational capability, while also considering whether the proposed route complements existing brokers, agents and direct channels or simply moves the same premium to a more expensive route.
This fit is also a governance requirement in many markets. In the European Union, the Insurance Distribution Directive requires the product approval process to identify a target market, assess relevant risks and use a consistent distribution strategy. Its product-governance regulation further requires manufacturers to select channels appropriate for the target market and product characteristics. (Directive (EU) 2016/97, Article 25; Commission Delegated Regulation (EU) 2017/2358, Article 8)
Who are the insurer, distributor, technology provider, payer and policyholder?
The customer-facing partner, the regulated distributor and the insured person may not always be the same party, so each program should define these roles clearly.
| Role | Precise meaning and responsibility |
|---|---|
| Insurer | Underwrites the policy, carries the risk and pays valid claims |
| Distributor | The insurer or authorised intermediary that presents, advises on or sells the policy |
| Technology provider | Connects the customer journey, distributor and insurer. The technology provider may not be the insurer or distributor |
| Payer | Funds the premium. May be the customer, employer, bank, retailer or another sponsor |
| Policyholder | Holds the contract and its rights and duties — may differ from the payer and the insured person |
In a simple add-on insurance, the end customer is usually the payer, policyholder and insured person. Under sponsored or group cover, the partner may fund the premium and hold a master policy while the customer is a covered member. The program must therefore state who pays, who is insured and who may claim.
What should insurers establish before opening a partner channel?
Embedded insurance can give insurers access to customers in banking, retail, travel, mobility and other established journeys. But partner reach is only a starting point. The insurer still needs a relevant customer risk, a suitable product and commercial model, and clear roles for everyone involved from sale through claim.
Once those choices are defined, the next question is whether the channel is viable. In Part 2, How Should Insurers Evaluate an Embedded Insurance Distribution Channel?, we look at the decision framework, channel economics, operating requirements and measures an insurer needs before scaling.
About discovermarket
discovermarket provides technology infrastructure for insurers, intermediaries and customer-facing partners. Its platform supports product configuration and distribution through APIs, SDKs, widgets and branded D2C sites, together with policy administration, claims workflows and performance reporting.
Sources
- European Insurance and Occupational Pensions Authority, Harnessing the benefits and managing the risks of digitalisation in insurance, 13 September 2023.
- Chubb, Life insurance made easy: Nubank, accessed 10 September 2026.
- Chubb and Grab, Grab and Chubb sign partnership to provide innovative in-app insurance solutions throughout Southeast Asia, 13 March 2018.
- European Union, Directive (EU) 2016/97 on insurance distribution, Article 25.
- European Commission, Commission Delegated Regulation (EU) 2017/2358, Articles 3 and 8.
- Financial Conduct Authority, PROD 4.2 Manufacture of insurance products, accessed 10 September 2026.
- Financial Conduct Authority, PROD 4.3 Distribution of insurance products, accessed 10 September 2026.