siliconindia | | AUGUST, 20258In the dynamic realm of financial services, insurance is undergoing a silent yet transformative evolution. Known as Embedded Insurance, this new avatar is increasingly becoming a seamless part of our everyday digital transactions from buying smartphones to booking flights. With India's digital economy witnessing a historic boom, Insurance 3.0 is not just reshaping how insurance is sold and serviced it's redefining who it serves. It's making insurance invisible, inclusive, and embedded into everyday life.The Changing Face of InsuranceFor decades, insurance in India meant elaborate paperwork, in-person meetings, and confusing jargon. Today, with a single tap on an app, a user can buy a life cover along with a credit card, add travel insurance to their flight booking, or get gadget insurance bundled with an e-commerce purchase. This is the essence of embedded insurance a product offered at the point of need, within a platform where the user is already transacting."Embedded finance is about meeting users where they are, for insurance, that means removing friction and offering products at relevant moments seamless, contextual, and fast", says Nischal Shetty, Founder of WazirX.What Is Embedded Insurance?Embedded insurance refers to the integration of insurance products and services within non-insurance digital platforms e-commerce apps, ride-sharing services, travel booking sites, fintech apps, or healthtech platforms. The insurance product is pre-integrated and often comes as a default or optional add-on during a transaction. Whether it's flight cancellation protection via MakeMyTrip, theft protection on Flipkart, or health top-ups via digital health platforms like Practo, these are real-world use cases of embedded insurance in India.Why It's Booming in IndiaSeveral factors are fueling this trend in the Indian insurance ecosystem:Massive smartphone penetration (over 750 million users) Rise of digital commerce and UPI-based paymentsLow insurance penetration (4.2% of GDP)Younger, tech-savvy consumers who prefer convenience over paperwork"Embedded insurance is a powerful tool for financial inclusion, it helps us reach first-time insurance buyers in tier 2 and tier 3 cities through platforms they already trust", says Tapan Singhel, MD & CEO of Bajaj Allianz General Insurance. According to a report by Bain & Company, embedded insurance could account for $70 billion in global gross written premiums by 2030, with India expected to be a major contributor.APIs, Open Banking, and Smart PersonalizationTechnology is the biggest enabler of this quiet insurance revolution. Key innovations include:· APIs (Application Programming Interfaces): Allow insurance products to plug into third-party platforms.· Open Banking: Enables seamless access to user financial data to personalize insurance offerings.· AI/ML Algorithms: Offer personalized underwriting, risk scoring, and premium calculations."We're seeing a convergence of fintech, insurtech, and healthtech, APIs are doing what brick-and-mortar branches could never achieve distribution at scale", says Rakesh Rewari, former Deputy MD at SIDBI and fintech policy advisor.Startups are Leading the Charge:Zopper: Partners with retailers to offer device and health insurance.Toffee Insurance: Offers contextual micro-insurance for cycles, dengue, and backpacks.Riskcovry: Provides an API stack for insurance-as-a-service across platforms.These insurtech startups in India are turning traditional insurance into modular, bite-sized offerings highly relevant, low-cost, and bundled in user-friendly digital interfaces.EDITORIAL EXCLUSIVEBy M R Yuvatha, Senior Correspondent, SiliconindiaHOW EMBEDDED FINANCE IS MAKING INSURANCE INVISIBLE BUT INCLUSIVE
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