This piece is by Louise Birritteri, CEO and Founder, Pikl
Not so long ago, embedded insurance took the industry by storm – and for good reason. It promised to transform distribution, streamline customer journeys, and unlock new revenue streams. For a while, it delivered. But in 2026, the industry is hitting a ceiling, and the companies paying attention are already building what comes next.
At its core, embedded insurance integrates products such as cancellation policies, warranties, and other protections, directly into the purchase of goods or services, offering coverage as part of the transaction without requiring any separate engagement. More than a buzzword, it genuinely reinvented the rigid, standalone policy sales of the past. The numbers speak for themselves: embedded insurance could account for more than $70 billion in gross written premiums by 2030, up from around $13 billion today.
But here’s the catch. By integrating insurance into non-insurance user journeys, the industry optimised the buying experience while leaving everything else untouched. Purchasing insurance got easier. Using it didn’t.
In 2026 the industry is facing a paradigm-shifting question: how do we transform insurance into something truly user-friendly and accessible without creating even more friction in the process?
The Embedded Insurance Ceiling
Embedded insurance solved a real problem. But most of what passes for it today is simply a legacy product shoehorned into a digital customer journey, and it often adds more friction than it removes.
Take travel. When you book a trip online and a travel insurance add-on appears at the end of the checkout flow, you’re not experiencing innovation. You’re experiencing a standard insurance policy from an external provider, dressed up in a digital wrapper. The moment you need to use it, you’re back in the old world: medical screenings, policy exclusions, and labyrinthine third-party claims processes. The experience of acquiring a policy has improved, but the experience of using it has not.
Platform operators suffer, too. They watch customers click through to third-party insurance providers, powerless to intervene as value quietly flows elsewhere. The result is a missed opportunity on every front. Diverse business models are still outfitted with one-size-fits-all policies rather than solutions designed for them. Consumers still face cumbersome claims processes. And the new revenue streams everyone was promised are still inaccessible.
Insurance-Enabled Business Models Unlock Growth
The businesses breaking out of this trap aren’t tweaking embedded insurance; they’re rethinking what insurance can do, offering the industry new models that can drive growth more simply.
These new business models don’t sell insurance to customers as an add-on. They use insurance as infrastructure, building it directly into their value proposition so that the product itself becomes more powerful.
Retail and e-commerce have shown what these insurance-enabled business models look like in practice. When a manufacturer offers a washing machine guarantee, or a dealership bundles an extended car warranty into a sale, the retailer owns the entire customer relationship and commercial model. Airlines and hotels have applied similar logic for years, baking risk and flexibility directly into pricing tiers rather than selling protection as an add-on.
The vacation rental market offers perhaps the most compelling case study, precisely because it’s a sector that has struggled so long with the older model. Property management companies (PMCs) have historically faced an impossible choice: impose rigid cancellation policies that discourage bookings or offer flexibility and absorb the revenue hit when guests cancel. Embedded travel insurance tried to bridge the gap by letting guests purchase cancellation protection separately, but all that did was decentralise the problem, diverting guests to external providers and leaving property managers completely out of the loop.
An insurance-enabled approach applied to vacation rentals changes the dynamic entirely. When insurance covers the property manager’s cancellation risk directly, flexible cancellation becomes a premium booking option rather than a liability. Guests are willing to pay up to 24% more for that flexibility, hosts receive guaranteed income even when cancellations occur, and cancelled bookings can then be resold. What was once a revenue leak can become a revenue multiplication engine.
And the crucial distinction is that guests never encounter the word “insurance” at all. They’re simply buying a better experience – one that happens to be powered by insurance infrastructure running quietly in the background. For operators, it means designing pricing, terms, and experiences around their specific business needs, rather than conforming to standardised products built for someone else.
Insurance in 2026
This year won’t be about replacing embedded insurance. It will be about evolving beyond it.
Just as embedded insurance reinvented traditional distribution, insurance-enabled business models can overcome the limitations that embedded insurance left unresolved. Both will coexist, serving different purposes across different sectors – but the growth edge is clear.
For insurers, this means transitioning from product providers to genuine business enablers. For platforms and marketplaces, it means treating insurance as competitive infrastructure rather than a compliance checkbox or a third-party afterthought. For guests, it means finally experiencing the confidence and flexibility that should have been baked into digital experiences from the very beginning.
The companies that lead the future of insurance won’t be the ones with the slickest checkout flow. They’ll be the ones that made insurance invisible and, in doing so, made their business unstoppable.
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