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Best’s Commentary: Embedded Insurance Gains Profile as a Digital Option

The growing use of embedded insurance in developed markets has provided a way to enhance product offerings and integrate risk protection directly into purchases. Yet key challenges remain, particularly with navigating potential regulatory constraints in a consumer-facing channel, achieving standardized and limited coverages, and keeping claims costs and handling at manageable levels, according to a new AM Best commentary.

The Best’s Commentary, “Embedded Insurance Gains Profile as a Digital Option,” states that the underlying motivation is to discreetly package an insurance purchase option alongside an initial and related transaction, which warrants a two-way level of trust with the distributor.

“Innovative use of technology by both the product provider and distributor is key, but gaps in capability between the two can exist,” AM Best Director Elí Sánchez said. “This can be a detriment in undeveloped markets where companies may struggle with not only creating an efficient digital approach with scale, but also accessing a broad and digitally oriented customer base.”

Sánchez will take part in a discussion titled, “Embedded Insurance 2.0: Has the Time Come?” later this month at RISKWORLD—the RIMS 2023 Annual Conference and Exhibition, which takes place April 30-May 3, 2023, at the Georgia World Congress Center in Atlanta. The embedded insurance discussion is scheduled for 4 p.m. (EDT) on Tuesday, May 2. To learn more about RISKWORLD, please visit the event overview.

To access the full copy of this commentary, please visit .

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2023 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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