From attach rate to white-label: 40 embedded insurance terms defined in one or two sentences each, grouped by roles, product, funnel, compliance and operations.
Embedded insurance sits between two industries that each have their own jargon, which means meetings where "premium," "attach" and "binding" mean different things to the people on either side of the table. This glossary defines the 40 terms that come up most in building and running an embedded programme — one or two sentences each, precise enough to settle an argument. Skim the section you need; the groups are roles, product and pricing, the funnel, money, compliance, and operations.
Roles and structures
- Embedded insurance: cover offered and sold inside the purchase or journey it protects — at the checkout, booking or onboarding — rather than through a separate insurance-shopping journey.
- Carrier (insurer): the licensed company that underwrites the policy, holds the premium, pays claims and answers to the regulator for solvency. The only party that can carry insurance risk.
- Distributor: the party that presents the offer to the customer. In embedded models, usually the platform, operating under its own permission or under the licence of an intermediary.
- Platform (host): the non-insurance business — marketplace, bank, HR system, retailer — inside whose product the insurance is sold.
- Infrastructure layer (embedded insurance platform): the intermediary connecting platforms to carriers: quoting, compliance, policy issuance, documents and revenue accounting behind one integration.
- Broker: an intermediary that represents the customer in arranging cover. Distinct from an agent, who represents the insurer; embedded intermediaries may be structured as either, depending on the market.
- Aggregator: a comparison site listing quotes from many insurers. Differs from embedded distribution in that the customer initiates an insurance-shopping journey rather than meeting the offer inside another purchase.
- MGA (managing general agent): an intermediary the carrier delegates underwriting authority to — pricing and binding risks on the carrier's paper within agreed limits.
- Affinity distribution: the pre-digital ancestor of embedded — insurance sold to a group through a trusted brand, such as a club or employer, typically via offline enrolment.
- Reinsurer: an insurer's insurer; takes a share of the carrier's risk in exchange for a share of premium. Invisible to the embedded customer but often decisive for capacity and pricing.
Product and pricing
- Premium: the price of the policy, set by the carrier. Written premium is the amount contracted; earned premium is the portion attributable to cover already provided.
- Underwriting: the assessment of a risk to decide whether to insure it and at what price. In embedded flows, usually automated rules applied to transaction data.
- Rating model: the actuarial formula that turns risk factors into a premium. Owned by the carrier; fed, in embedded journeys, by data the platform passes.
- Sum insured (limit): the maximum the policy pays. Sub-limits cap particular benefit types inside the overall limit.
- Excess (deductible): the first portion of any claim the customer bears. Higher excess, lower premium.
- Exclusion: a risk or circumstance the policy explicitly does not cover. The most common source of claims disputes and the most important thing to disclose plainly.
- Rider (endorsement): an amendment adding, restricting or modifying cover on a base policy.
- Parametric cover: insurance that pays a fixed amount when a defined event measurably occurs — a flight delayed beyond a threshold, for example — rather than indemnifying an assessed loss.
- Takaful: the Islamic cooperative alternative to conventional insurance, in which participants contribute to a shared fund used to pay claims, operated by a licensed takaful company.
- Group policy: one master policy held by an organisation covering many beneficiaries — the common structure for employer medical and some platform-wide covers.
The embedded funnel
- Eligible transaction: a host transaction where an offer could lawfully and technically be shown — in-scope customer and product, quote returned. The correct denominator for attach rate.
- Quote: a priced offer for a specific risk, generated from transaction data, usually valid for a limited window.
- Pre-fill: populating the quote request from data the platform already holds, with the customer's consent, so the customer confirms rather than types.
- Attach rate: policies bound divided by eligible transactions. The defining conversion metric of embedded distribution.
- Binding: the moment cover legally comes into force. In embedded flows, ideally simultaneous with payment and instant document issuance.
- Conversion (quote-to-bind): the share of started insurance journeys that end in a bound policy; isolates in-flow friction from offer appeal.
- Opt-in vs opt-out presentation: whether the customer actively selects cover or must deselect a pre-ticked option. Pre-ticked boxes are restricted or banned in many markets; opt-in is the defensible default.
- Single-provider mode: the embed shows one quote from one carrier. Simplest journey, no in-checkout price competition.
- Comparison mode: the embed shows ranked quotes from a panel of carriers, moving price competition inside the checkout.
- Panel: the set of carriers whose products can be quoted through a given integration.
Money
- Commission (revenue share): the distribution remuneration paid out of premium to the platform and intermediary. The platform's revenue line in an embedded programme.
- Net rate: a pricing structure where the carrier quotes its keep-price and the distributor's margin is added on top, where market rules permit, rather than carved out of a gross premium.
- Clawback: repayment of commission already paid, triggered by cancellation or refund of the underlying policy.
- Cooling-off period: a statutory window after purchase in which the customer may cancel for a full or near-full refund. Drives the gap between gross and net commission.
- In-force book: the set of policies currently active — the stock your renewal revenue lives on, as opposed to cumulative sales, which only ever grows.
Compliance and operations
- Distribution licence (intermediary permission): the regulatory authorisation required to sell or arrange insurance. In embedded models, held by the platform itself or, far more commonly, by the infrastructure layer it integrates.
- Disclosure: the information that must be presented before sale — what is covered, what is excluded, the price, and the customer's rights — in a form the customer can keep.
- KYC and sanctions screening: identity and watchlist checks required before issuing certain policies; in good embedded flows, run automatically from data already collected.
- Policy administration: the record-keeping spine of a programme — issuing, amending, cancelling and renewing policies, and producing the documents and audit trail regulators expect.
- FNOL (first notice of loss): the moment a claim is first reported. Embedded programmes are judged on how easily the customer gets from the platform they bought in to a filed claim.
Terms drift, and markets attach local nuance to several of these — takaful structures, intermediary categories and cooling-off mechanics all vary by jurisdiction. Where a definition here conflicts with your regulator's, the regulator wins. We keep this glossary updated as usage settles; if a term you argue about at work is missing, that is useful information — tell us.