The $1.8 Trillion Blind Spot: How Embedded eCommerce is Redesigning the Future of Insurance

embedded insurance frontier firm venture clienting Feb 20, 2026

The Great Distribution Shift: Discover how embedded insurance is quietly revolutionizing the industry, moving from a "bought" to a "lived" experience.
The Connector Economy: Learn why ecosystem partnerships and B2B2C models are the new frontier for closing the global protection gap.
The Trust Imperative: Understand the critical role of data, AI, and ethical guardrails in building the future of personalized, embedded protection.

The Dawn of Invisible Protection: A What-If Scenario

What if insurance weren’t something you had to actively seek out, purchase, and manage? What if, instead, it was a seamless, invisible layer of security woven into the very fabric of your daily life? Imagine buying a new smartphone, and the moment you complete the purchase, it’s instantly protected against accidental damage, with no extra forms to fill out, no separate transactions, no added friction. Picture booking a flight, and as you confirm your ticket, travel insurance tailored to your specific destination and itinerary is automatically included. This isn’t a far-off futuristic vision. It’s the reality being built today, a paradigm shift from a product that is sold to an experience that is simply lived. This is the world of embedded insurance, and it represents one of the most profound transformations our industry has ever witnessed. These seismic shifts in the insurance landscape are compelling companies to rethink their strategies and adapt rapidly to stay competitive.

This shift is not just about convenience. It’s about addressing a colossal and growing challenge: the global protection gap. The chasm between the economic losses faced by individuals and businesses and the amount covered by insurance has swelled to a staggering $1.8 trillion (in premium-equivalent terms, based on Swiss Re estimates). Many organizations are grappling with similar challenges as they attempt to adapt to these sweeping changes and close the protection gap. It’s a clear signal that the traditional insurance model, for all its strengths, is leaving vast segments of the population exposed and vulnerable. As Rob Schimek, the Group Chief Executive Officer of bolttech, puts it, the mission is clear: “to connect people with more ways to protect the things that they value.” The urgency to close this gap is amplified by four irrefutable global drivers identified by Schimek: an aging and growing population, rapidly evolving technology, and a warming planet. These forces are not just expanding the protection gap; they are fundamentally reshaping the nature of risk itself. At the same time, they are creating new opportunities for innovation and growth in insurance.

As the industry seeks to address the protection gap and respond to these urgent changes, it’s important to recognize that failure is an inherent part of experimentation and transformation. Embracing failure as part of the process is essential for driving meaningful progress and challenging the status quo.

Why This Matters Now: The Trillion-Dollar Tipping Point

The imperative to act is no longer a distant concern; it is an immediate and monumental commercial opportunity. The embedded insurance market is not just growing; it is exploding. Projections show the market rocketing to over $700 billion by 2030, with some estimates placing embedded insurance at ~$1.5 trillion of global insurance distribution / gross written premium (GWP) by 2032, according to the Swiss Re peer group report. By the end of this decade, embedded channels could account for around 25% of global P&C gross written premiums (GWP), fundamentally rerouting revenue streams that have been entrenched for a century, says KPMG. In the US alone, the embedded P&C market is forecast to reach $70 billion by 2030, with the personal auto sector poised for a major shift. A mere 20% adoption of embedded models in this space could divert $50 billion in premiums from traditional channels. To capture the opportunity, insurers seeking long-term value and growth must invest significantly in digital delivery and embedded insurance capabilities.

We are at a tipping point. The convergence of digital consumer behavior, technological advancement, and the sheer scale of unmet protection needs has created a perfect storm of disruption. Measuring performance across digital initiatives and embedded offerings will be critical to ensure ongoing success and maximize ROI. For incumbents and innovators alike, the message is unequivocal: the future of insurance distribution is not about building higher walls but about forging wider connections. The firms that thrive will be those that embrace a new role—not just as underwriters of risk, but as enablers, making protection as simple, accessible, and integrated as the digital transactions that define modern life. Embracing embedded models can deliver a true competitive advantage by enabling faster, more adaptive responses to market changes. To navigate this transformation effectively, companies must align their efforts with a clear business strategy that guides digital initiatives and ensures relevance in a rapidly evolving landscape.

The Great Distribution Shift: From Monoliths to Ecosystems

The traditional insurance industry, long characterized by its monolithic structure and direct-to-consumer or agent-based sales models, is undergoing a fundamental architectural redesign. The future of distribution is not about owning the customer in a silo but about meeting them where they are, within the flow of their digital lives. This is the essence of the B2B2C model, a strategy that leverages partnerships to embed insurance into third-party platforms and customer journeys. As Rob Schimek explains, bolttech operates as a “connector,” an enabler for both the providers of protection and the distribution partners who have access to customers. “We don’t own the customer,” Schimek clarifies, “we’re the intermediary trying to make that connection happen better, faster, smarter than ever before.”

The future of insurance distribution is increasingly ecosystem-led. Instead of trying to “own” the customer in a silo, insurers are building ecosystem partnerships through B2B2C models, embedding protection into the platforms and customer journeys where demand already exists. In this connector economy, the competitive advantage comes from making connections between carriers and distribution partners faster, smarter, and more seamless—so coverage shows up at the point of need with less friction and greater relevance. As collaboration expands across industries (from telcos to automakers to retailers), insurance becomes less of a standalone transaction and more of a built-in service that customers experience naturally in the flow of their digital lives.

This shift is a direct response to evolving consumer expectations and economic pressures, impacting organizations across the entire insurance and financial services sector. Today’s digital-native customers, particularly Millennials and Gen Z, demand convenience and seamlessness. A staggering 81% of them want the option to purchase insurance directly through their auto purchase, and 75% cite convenience as the primary driver. They are not just open to embedded offers; they expect them. This behavioral shift is creating a powerful current pulling the industry away from traditional channels. Insurers are recognizing that to stay relevant, they must become part of a broader ecosystem. Business leaders play a critical role in guiding this transformation, rethinking operating models and fostering a culture of innovation to ensure their organizations adapt successfully. This means collaborating with telcos, automotive manufacturers, retailers, and other technology platforms to offer protection at the point of need. The numbers confirm this trend, with the global B2B2C insurance market projected to more than double, reaching $10.5 billion by 2032.

Integrating insurance into digital journeys requires organizations to adapt their business processes, ensuring workflows and operational procedures support embedded models and seamless customer experiences. Schimek shares:

“I believe that the industry’s DNA is changing as we speak because we’re seeing this ecosystem concept being accepted. If everyone wants to solve it on their own, it will only continue in that trend and in that direction [toward a growing protection gap]. I’m seeing more and more collaboration, more and more cooperation, even more and more coopetition.”

This collaborative model is not just about reach. It’s about relevance. By integrating with partners, insurers gain access to rich contextual data that allows for the creation of “tailored, affordable, accessible, and convenient” products, as Schimek emphasizes. As organizations adapt to new models and rising customer expectations, engaging employees in the transformation process is essential to drive adoption, foster innovation, and ensure successful implementation. It is this hyper-personalization that transforms insurance from a generic, one-size-fits-all product into a precise solution that resonates with the individual’s specific circumstances and needs at the exact moment of a transaction.

The Connector in Action: The bolttech Blueprint

Bolttech stands as a powerful testament to the speed and scale achievable with a connector-driven, ecosystem-first approach. In just a few years since its 2020 launch, the company has become a dominant force in the insurtech landscape, demonstrating what Schimek calls “the art of the impossible.” The company’s metrics are staggering: Rob shares that bolttech quotes US$75B+ in premiums annually and operates in 39 markets, works with 700+ distribution partners, and has been cited as managing 14M+ active policies. This explosive growth culminates in a US$2.1B valuation reported in connection with its Series C round.

Bolttech’s approach is designed for enterprise scale, supporting strategic digital delivery and risk management across large organizations. Their model shows how ecosystem building can forge strategic alliances with industry giants, including AXA, Generali, Allianz, and Sumitomo Corporation. These are not superficial affiliations; they are deep integrations designed to deliver embedded solutions at scale. Many of these partners are established companies transitioning from traditional offline models to embedded eCommerce and digital insurance, leveraging bolttech’s platform to stay competitive and meet evolving customer demands. Whether it’s device protection with a telco, travel insurance with an airline, or auto insurance with a car dealership, bolttech provides the critical “connective tissue.” As Schimek notes, “It should never be about bolttech… we position ourselves as an enabler because it’s not about bolttech solving the problem by itself. It’s about us helping the people who are trying to solve the problem do it better, do it faster.” The platform offers a wide range of capabilities, dynamically routing models and services to meet the specific needs of each partner and environment.

This philosophy of enablement over disruption is key to their success. It allows them to tap into a “blue ocean” of opportunity, the vast, unsolved problem of the protection gap, without getting bogged down in zero-sum competition. Successful integration in such a distributed ecosystem requires significant resources, including human and capital assets, to build, manage, and optimize partnerships. The use of advanced digital tools is also essential, enabling seamless integration, risk assessment, and compliance across complex operational environments. “Isn’t it great to swim in a blue ocean where we’re not always fighting against one another?” Schimek asks. This collaborative spirit is the engine of their growth, proving that in the new insurance economy, the most valuable players will be those who build bridges, not islands.

The New Underwriting: AI, Data, and the Trust Economy

The engine powering this embedded revolution is data, and the intelligence shaping it is AI. The ability to collect, analyze, and act on vast streams of information is what makes hyper-personalized, contextually relevant insurance possible. The rise of connected devices, from telematics in cars to smart home systems, provides an unprecedented real-time view of risk. As Schimek points out, using the example of auto insurance:

“The data that you can get from the telematics device in the car is so much more powerful than the data that you can get from asking someone a few questions.” shares Schimek

This shift moves underwriting from a static, rearview-mirror assessment to a dynamic, forward-looking one. Protecting confidential information is paramount in this AI-driven insurance landscape, as safeguarding sensitive data is essential to maintaining trust and meeting regulatory requirements.

However, this power comes with profound responsibility. The effectiveness of AI and data-driven models is entirely dependent on consumer trust. As Schimek rightly asserts:

“Does this idea of customer even trust you to use AI to interact with them? And if they don’t trust you for that, then AI won’t be successful.”

The industry is at a critical juncture where it must prove its worthiness of that trust. In practice, that looks like moving beyond mere compliance with regulations to establishing a strong ethical framework. Strong governance in data management is necessary to ensure security, compliance, and auditability throughout the insurance value chain. Schimek advocates for a “moral compass” that guides company behavior, operating with a “headline litmus test” in mind: would you be proud to see your actions on the front page of the Wall Street Journal? Designated individuals must be responsible for upholding data ethics and overseeing risk mitigation actions.

This focus on trust is not just an ethical imperative; it is a commercial one. A 2025 consumer report found that 64% of Digital Natives believe insurance should be purchased and managed primarily online, and that this preference is strongly tied to trust and transparency around data use.

Insurers who are transparent, who use data responsibly to deliver tangible value, and who prioritize the customer’s best interests will be the ones who win in the trust economy. The adoption of GenAI is already widespread, with 76% of US insurance executives having implemented it in some capacity, but its long-term success hinges on maintaining this delicate balance between innovation and integrity.

A unified system that integrates governance, intelligence routing, and operational layers is essential for seamless embedded insurance functionality. Leveraging knowledge from risk management frameworks and project management standards enhances the accuracy of AI-driven risk assessment. Real-time data enables better decision-making at every level of the organization, supporting enterprise agility.

Companies that lead in AI adoption and digital transformation are setting new standards for the industry. The improvement in customer experience through personalization and embedded insurance is a key differentiator for insurers in the digital age.

Reimagining Protection for 2030 and Beyond

Looking toward 2030, the concept of insurance is set to be completely redefined. The siloed product categories of today—auto, home, health—will begin to blur, coalescing into a holistic view of an individual’s lifestyle risk. Schimek muses:

“Wouldn’t it be great? I know enough about you to know how I would think about your auto insurance, your homeowners insurance, your casualty insurance, your health insurance.”

This unified approach, powered by AI and a web of interconnected data, will make protection a proactive, personalized, and truly lived experience. The industry will continue to evolve as new technologies are adopted, enabling insurers to deliver more tailored solutions and adapt to changing customer needs.

Schimek draws a powerful analogy from Ernest Hemingway’s “The Sun Also Rises” to describe the pace of this change: it happens “at first slowly, and then suddenly.”

While the day-to-day evolution may seem incremental, the cumulative effect will be a sudden and irreversible transformation of the industry. The development of new models for risk assessment and protection will play a critical role in this shift, supporting more accurate and dynamic coverage.

The key, he argues, is to embrace experimentation and a “fail fast” mentality. “Don’t be afraid to dent the car,” he advises his team, “don’t crash it… but drive it and drive it fast, because we’re not going to solve this protection gap unless we move fast and we move at scale.”

As organizations navigate the different phases of digital adoption, from initial assessment to deployment, they must recognize that change is no longer optional but an ongoing imperative.

This future is not a distant dream. It is being built now, in the partnerships being forged, the technologies being deployed, and the customer-centric philosophies being adopted. The path forward involves strategic investment in robust network infrastructure, continuous improvement based on lessons learned, and a focus on balancing the unique challenges of innovation and risk management.

The journey from a product bought to an experience lived is well underway, with embedded insurance models enabling companies to generate revenue, achieve cost savings, and manage costs more effectively. These changes are reshaping business operations, creating new job titles, and delivering significant benefits for both customers and companies.

Raising awareness about these new insurance models is essential for successful adoption and change management. For the leaders of tomorrow, the challenge is clear: to be the connectors, the enablers, and the trusted stewards of a future where everyone has the security to pursue their ambitions without fear.

Frequently Asked Questions (FAQ)

1. What is embedded insurance, and how is it different from traditional insurance?

Embedded insurance is protection bundled as a native feature with the purchase of a third-party product or service. Unlike traditional insurance, which is a standalone product that customers must actively seek out and purchase, embedded insurance is offered at the point of sale, making the process seamless and convenient. For example, purchasing travel insurance as part of a flight booking or insuring a new phone at the time of purchase are forms of embedded insurance. The key difference is the distribution model: it shifts from a direct-to-consumer or agent-based approach to a B2B2C model where insurance is integrated into the customer journeys of other businesses.

2. What is the 'protection gap' and why is it a significant problem?

The protection gap is the difference between the total economic losses from events such as natural disasters, health crises, or other risks, and the amount of those losses covered by insurance. This gap is currently estimated at $1.8 trillion globally. It is a significant problem because it means that a vast number of individuals, families, and businesses are financially vulnerable and may struggle to recover from unexpected events. The gap is widening due to factors like climate change, an aging population, and rapid technological evolution, making it urgent for the insurance industry to find more effective ways to extend protection.

3. How does a B2B2C or 'connector' model help close the protection gap?

A B2B2C (Business-to-Business-to-Consumer) model, as employed by companies like bolttech, acts as a 'connector' or intermediary. Instead of trying to reach every customer directly, insurers partner with other businesses (like retailers, car manufacturers, or telcos) that already have large customer bases. By embedding insurance offers into these partners' existing products and services, they can reach a much wider audience at the precise moment of need. This model makes insurance more accessible, convenient, and often more affordable, helping bring protection to previously uninsured or underinsured segments of the population and thereby helping to close the protection gap.

4. What role do AI and data play in the future of embedded insurance?

AI and data are the core technologies enabling the embedded insurance revolution. They enable the creation of highly personalized, contextually relevant insurance products. For example, telematics data from a car can be used to offer usage-based insurance, or data from a smart home device can inform a homeowner's policy. AI algorithms can analyze this data in real-time to assess risk more accurately and offer a fair price. However, the use of this data is critically dependent on consumer trust. Insurers must be transparent about how they use data and demonstrate that it creates value for customers, not just to increase profits.

5. Who are the target audiences for this new wave of insurance products?

While embedded insurance can benefit everyone, it resonates particularly with younger, digitally native generations like Millennials and Gen Z. These consumers have grown up with seamless digital experiences and expect the same convenience across all their transactions, including financial services. Research shows that over 80% of these younger consumers want the option to purchase insurance as an embedded part of other purchases, such as buying a car. Therefore, insurers and their distribution partners must focus on creating digital-first, user-friendly experiences to capture this crucial and growing market segment.