Why Tech Giants Are Betting on Embedded Insurance

Understanding the Embedded Insurance Business in America

Big Techs have been positioning themselves as providers of financial and protection services. Within this strategy, one of the most notable moves is the bet on embedded insurance.

This trend is not a peripheral detail: it represents a structural reconfiguration of the U.S. insurance market, with the potential to alter value chains, expand revenue margins, and redefine how consumers perceive risk.

What is embedded insurance?

Practically speaking, embedded insurance is the offer of protection already integrated into a product or service.

Instead of the customer seeking out an insurer separately, the coverage is offered directly at the point of sale.

Imagine you buy a new iPhone, and at checkout, Apple suggests protection against theft and screen damage—already priced and ready for activation.

This integration simplifies the process, eliminates contracting barriers, and, most importantly, increases adoption—a crucial factor for companies dealing with massive markets.

Why did Big Techs enter this game?

The insurance market moves over $1.5 trillion per year in the United States, while also being a sector notorious for bureaucracy and poor customer experience.

This is where tech giants come in, with their data power, intuitive design, and distribution capacity.

Some factors explain this shift:

• Data as a central asset
  Big Techs already hold detailed information on purchasing behavior, consumption habits, and device usage patterns.
  This complete database allows for more precise risk calculation than traditional models.
• Escala y conveniencia
  Millions of Americans use Amazon, Apple Pay, Google Wallet, or other digital ecosystems daily.
  Embedding insurance offerings into this flow means access to a huge customer base, without the need for traditional acquisition campaigns.
• Customer loyalty
  Embedded insurance is another link that locks users into the Big Tech ecosystem.
  Someone who purchases device protection within Apple, for example, tends to maintain this relationship for years, creating a strategic dependency.
• Revenue diversification
  In a scenario where digital advertising faces regulation and competition for subscriptions is fierce, insurance represents a new recurring revenue source.
  The best part is that it’s also less exposed to the fluctuations of the ad market.

Examples already in practice

• AppleCare+: Far beyond an extended warranty, it has become a model of embedded insurance within the iPhone, iPad, and MacBook purchasing experience, already generating billions in revenue for Apple.
• Amazon Protect: In partnership with insurers, the platform offers coverage for electronics, furniture, and even appliances purchased on the site, with contracting closed in seconds.
• Google and travel insurance: through integrations in its search and booking services, Google has tested adding travel and cancellation insurance, strongly appealing to users seeking convenience.

These initiatives point to a future where consumers may no longer even notice the boundary between product, service, and protection.

Economic impacts on the U.S. market

• Competitive pressure on traditional insurers
  Established companies need to rethink their distribution models, facing the risk of losing ground to players who dominate digital channels and simplify the buying journey.
• Reduction of information asymmetries
  With large-scale data usage, actuarial calculations tend to become more personalized, reducing the risk of distorted pricing, but also raising debates around privacy and ethical data use.
• Increase in insurance inclusion
  Millions of Americans still don’t purchase insurance because they see the process as complex or unnecessary. By embedding the service in everyday transactions, there’s potential to increase market penetration.
• Shift in revenue flows
  Embedded insurance creates new monetization channels for Big Techs, while at the same time pressuring intermediaries’ margins. Insurtech startups may find space as partners but could also face fierce competition.

Challenges and points of attention

Without a doubt, regulation is the biggest hurdle, since in the U.S. the insurance industry is regulated at the state level, and the entry of global companies demands significant adaptation.

Data privacy must be respected, and using personal information to define coverage creates a dangerous boundary.

Despite the convenience, many Americans still trust traditional insurers more than tech companies when it comes to financial protection.

Consumers may also become dependent on closed ecosystems, and purchasing insurance within specific platforms could limit competition and make switching between providers more difficult.

Written by

Gabriel Gonçalves