Insurers are changing how they sell their products, focusing more on embedded distribution channels and using artificial intelligence (AI) to meet the needs of today’s consumers. This shift is highlighted in a recent survey by GlobalData, which gathered over 170 responses in the first quarter of 2025.
The survey found that embedded insurance is seen as the most promising way to grow personal lines, with 31.6% of respondents favoring this approach. This model, which includes offering insurance as part of a purchase—like travel insurance when booking a flight or auto coverage with a new car—outperformed direct-to-consumer sales and traditional broker methods.
Beatriz Benito, an insurance analyst at GlobalData, explained that embedding insurance into digital shopping experiences helps insurers connect with customers who might not engage with traditional insurance options. She noted that offering policies at the right moment increases the chances of a sale. This model also allows non-insurance companies to help sell insurance, broadening access to customers.
Although embedded insurance isn’t new, its popularity is growing alongside the rise of e-commerce and consumer demand for seamless online experiences. Benito pointed out that as more people shop online, they expect a smooth process across all industries.
The survey also explored consumer attitudes toward AI in insurance. Many respondents see benefits, with 73.8% believing AI can enhance customer service and 71.5% expecting it to improve efficiency. However, despite these positive views, some consumers are hesitant about AI’s role in claims processing and data handling. Concerns about transparency and trust remain significant barriers.
Benito emphasized that insurers need to be clear about how they use AI, especially when it impacts claims or pricing. Building trust with consumers will be crucial as the industry moves forward.
This shift toward embedded insurance and AI reflects the changing landscape of consumer behavior and the insurance industry’s efforts to adapt. As these trends continue to evolve, insurers will need to find ways to address consumer concerns while leveraging new technologies to improve their services.