Most of the conversation about embedded insurance focuses on the distribution endpoint: the moment when a consumer buys a laptop and is offered device insurance in the same checkout flow, or when a business books a flight and is offered travel disruption cover in the same booking interface. This distribution-endpoint framing is commercially useful — it tells you where the customer acquisition advantage is. But it obscures the more interesting and harder problem: the entire insurance supply chain behind the distribution endpoint needs to be restructured to make embedded insurance work at scale. The distribution innovation is visible. The supply chain restructuring is less visible and more important.
What Sits Behind an Embedded Insurance Product
To embed insurance into a distribution partner's product flow, the following chain of relationships and technical integrations needs to function in near-real-time: the distribution partner's platform passes risk data to the insurance platform; the platform applies underwriting logic and returns a bindable quote; when the customer accepts, the policy is issued, the premium is collected, and premium flow is allocated between distribution partner, MGA, carrier, and reinsurer; the carrier's Solvency II capital model is updated with the new exposure; the reinsurance treaty records the cession if applicable; and the policyholder receives documentation that satisfies IDD disclosure requirements in their jurisdiction.
In a traditional insurance stack, each of these steps happens in a different system, often managed by a different party, on timescales of days to weeks. The embedded insurance product proposition requires all of them to happen in seconds, invisibly, within a third-party product flow that the insurance provider does not control. The technical infrastructure to do this does not exist as a packaged product. It is being assembled by a small number of companies, including Qover and Wakam in our portfolio, working with different pieces of the supply chain problem simultaneously.
The MGA Layer: Where the Complexity Concentrates
In the embedded insurance supply chain, the MGA (Managing General Agent) layer is where the complexity concentrates. An MGA that is enabling embedded insurance through a digital platform typically needs to hold multiple carrier delegated authority agreements — because different embedded products may be best underwritten by different carriers, and a distribution partner that distributes across multiple European markets needs carrier relationships in each jurisdiction where their product is live.
Managing these delegated authority agreements is not primarily a technology problem. It is a compliance and governance problem: each carrier grants delegated underwriting authority within defined limits and product parameters; the MGA must operate within those parameters, report bordereaux accurately and on schedule, maintain claims handling protocols that the carrier has approved, and stay within the aggregate exposure limits that the delegated authority agreement allows. Exceeding delegated authority — writing risk outside the agreed parameters — is a serious compliance event that can terminate the carrier relationship and create coverage disputes on existing policies.
The platforms that have built this MGA compliance infrastructure correctly — where the delegated authority rules are implemented as hard constraints in the policy issuance engine, not as guidelines for human underwriters to follow — are substantially more scalable than those where compliance relies on manual review. The compounding risk in a high-volume embedded distribution model is that the edge cases where delegated authority is at risk of breach are precisely the edge cases that arrive in the highest volume and the shortest decision windows.
Capital Efficiency in the Reinsurance Layer
One aspect of the embedded insurance supply chain that is rarely discussed in InsurTech context — partly because it is genuinely technical and partly because seed-stage companies do not usually engage with it until later — is the reinsurance structure that sits above the carrier layer.
The economics of embedded insurance at scale depend substantially on how efficiently the carrier can transfer risk to the reinsurance market. A carrier writing €50M of premium through embedded distribution channels needs either enough capital to retain that risk on its own balance sheet (expensive) or access to proportional or excess-of-loss reinsurance treaties that make the risk transfer economics work. For newer carriers and MGAs that have short loss history in the embedded channels they are underwriting, securing reinsurance on commercially reasonable terms is a meaningful constraint.
The companies that solve this most elegantly do so at the product design level — building embedded insurance products that naturally produce loss experiences that reinsurers can model from analogous traditional book experience. Embedded travel disruption insurance, for example, has reinsurance precedent from traditional travel insurance books. Embedded cyber insurance for e-commerce transactions has less reinsurance precedent and consequently more expensive or less available reinsurance capacity. Product design decisions that seem purely commercial at seed stage have downstream implications for capital cost that emerge at scale.
Distribution Partner Economics and Why They Matter for Supply Chain Design
The distribution partner — the platform that embeds the insurance product — has its own economics in the supply chain that shape what insurance supply chain architecture is feasible. Distribution partners typically receive a commission on premium (15–25% is the typical range for embedded distribution partnerships, though it varies substantially by product and volume) and are highly motivated to maximise attach rate — the percentage of their transactions that generate an insurance purchase.
High attach rate from a good distribution partner is commercially excellent. It also concentrates the insured risk pool in ways that can create adverse selection dynamics. A travel booking platform that offers flight delay insurance to customers who are booking complex itinerary changes — not to all customers, but in a way that the interface makes it most visible to those customers — will have a different claims experience than a platform that offers it uniformly across all bookings. The insurance supply chain, from MGA underwriting parameters to carrier pricing to reinsurance treaty terms, needs to accommodate this when it is present. The teams that understand this are the ones who think about attach rate and loss ratio jointly, not separately.
The Infrastructure Companies That Make This Work
The category of seed-stage company that we find most compelling in the embedded insurance space in 2025 is not the distribution innovator — those businesses exist and some are excellent, but the supply chain problem is largely understood. The compelling category is the infrastructure company that solves a specific piece of the supply chain for multiple distributors and carriers simultaneously: the MGA compliance engine, the multi-carrier premium reconciliation layer, the cross-border regulatory documentation system. The infrastructure that makes the embedded insurance supply chain function at the speed and scale the distribution endpoint promises. This is the plumbing. It is unglamorous. It is also the layer with the most defensible network effects.