TL;DR
- Most digital marketplaces route all insurance through a single carrier – regardless of what is being bought. The result is a structural mismatch between carrier and inventory that suppresses conversion.
- Fewer than one in four customers who encounter an insurance offer at point of sale complete a purchase. Product-market fit at the quote stage is a primary driver of that gap.
- Platforms operating multi-carrier panels with intelligent routing achieve attachment rates approximately 1.8 times higher than single-carrier equivalents (Oliver Wyman, 2023).
- The constraint is rarely data. Most platforms already hold the inventory and buyer signals needed to route more precisely. The gap is the orchestration layer that acts on those signals in real time.
- Three conditions determine readiness: data accessibility at point of engagement, carrier panel differentiation, and API-level carrier integration.
Digital marketplaces sit on one of the most commercially valuable data sets in financial services. They know what a customer is buying, what it costs, when they intend to buy it, and – increasingly – who that customer is. They capture intent at the most commercially charged moment in the purchase lifecycle.
And yet most platforms route insurance the same way regardless of what is being bought. One carrier. One product. One conversion rate – routinely stuck in the low-to-mid teens.
The gap between what a platform knows and what it applies to insurance matching is one of the most underleveraged revenue opportunities in digital commerce today. It is also, structurally, one of the most solvable.
The product mismatch problem
Insurance is not a commodity that behaves identically across inventory categories. Carriers price risk based on what is being insured, the profile of the buyer, the value of the asset, and the conditions surrounding the purchase. The right carrier for a seven-year-old sedan is not the right carrier for a brand-new premium vehicle. The right travel insurer for a last-minute domestic flight is not the right insurer for a six-week multi-destination international itinerary. The right home insurance product for a first-time buyer in a regional market is not the right product for an investor purchasing a high-value urban apartment.
When a platform routes all its inventory to a single carrier regardless of what is being purchased, it creates a structural mismatch between what the insurer is optimised to price and what the customer actually needs. The result is a quote that is either uncompetitive, poorly suited, or both – and a customer who abandons the insurance offer before completing a transaction.
McKinsey’s 2023 embedded insurance research estimated that fewer than one in four customers who encounter an insurance offer at point of sale complete a purchase – a conversion gap the report attributes in part to product-market fit failures at the quote stage. The platforms are not failing to present insurance. They are presenting the wrong insurance.
Why rule-based routing does not scale
The short-term fix most platforms reach for is manual segmentation: route one category of listings to one carrier, another category to a second carrier, review performance periodically, and adjust as needed.
This approach has an obvious ceiling. Rule-based routing operates at the category level, not the listing level. It cannot respond to the granular pricing signals that determine whether a specific vehicle, flight, or property is likely to convert with a specific carrier on a given day. It relies on performance data being surfaced and acted on by a team – which means carrier underperformance is typically identified retrospectively, not prevented at the point of quote. And it becomes increasingly difficult to maintain as inventory diversity grows and carrier panel depth increases.
Bain and Company’s 2022 research on embedded financial services found that platforms relying on static partner configurations tend to see attachment rates plateau as customer expectations for relevance and personalisation increase. The insight is directly applicable here: rule-based routing is a ceiling masquerading as a strategy.
The commercial opportunity sits in dynamic, listing-level matching – routing each transaction to the carrier most likely to produce a competitive quote and a completed sale, in real time, without manual intervention.
What intelligent routing changes commercially
When the right carrier is matched to the right inventory profile at the point of engagement, quote competitiveness improves. When quote competitiveness improves, conversion rates improve. When conversion rates improve, the platform’s revenue per transaction increases – without acquiring a single additional visitor.
This is not a marginal uplift scenario.
Research published by Accenture in their 2023 Embedded Insurance report found that personalised insurance experiences at point of purchase can increase conversion rates by 30% to 50% compared to generic single-carrier placements. At platform scale – where millions of transactions move through a purchasing funnel annually – the difference between a 14% and a 22% conversion rate is not incremental. It is the difference between a supplementary revenue line and a structurally significant business.
Beyond conversion, intelligent routing creates conditions for a more defensible commercial model. Platforms that can demonstrate carrier-level attribution, quote-level conversion data by inventory segment, and performance variance by insurer hold meaningful leverage in carrier partnership negotiations. That data infrastructure is also the foundation for a per-quote or per-conversion commercial structure – a monetisation model that scales with volume rather than being capped by a fixed placement fee.
Oliver Wyman’s 2023 Digital Distribution in Insurance report found that platforms operating multi-carrier panels in mature embedded insurance deployments achieve average attachment rates approximately 1.8 times higher than single-carrier equivalents. The panel itself is not the differentiator. The routing intelligence that allocates transactions across it is.
See how embedded insurance fits your platform. Kanopi works with digital marketplaces across automotive, travel, and property to build carrier routing and orchestration infrastructure.Book a structured walkthrough to explore what the commercial model could look like for your platform.
| Single-carrier model | Intelligent routing model | |
|---|---|---|
| Conversion rate | Plateaus in the low-to-mid teens. Carrier mismatch suppresses quote competitiveness across large inventory segments. | 20–30%+ achievable. Routing matches each listing to the most price-competitive carrier in real time. |
| Commercial model | Fixed placement or media fee. Revenue capped regardless of volume or performance. | Per-quote or per-conversion structures become viable. Revenue scales with platform transaction volume. |
| Carrier leverage | Single partner holds most of the leverage. Limited negotiating position at renewal. | Multi-carrier panel with attribution clarity creates competitive tension and stronger commercial terms. |
| Performance visibility | Carrier underperformance identified retrospectively in review meetings. No automated alerting. | Continuous carrier-level conversion data by inventory segment. Performance variance visible in real time. |
| Inventory fit | One product for all listings. Structurally mismatched to inventory diversity. | Each listing routed to the carrier best-fit for its profile — vehicle age, property type, trip duration. |
| Scalability |
Ceiling Static configuration. Requires manual intervention to adapt to inventory changes. |
Scales Routing logic improves as conversion signals accumulate. No manual reconfiguration needed. |
The three infrastructure conditions that determine readiness
Not all platforms are equally positioned to capture this opportunity. The difference typically comes down to three conditions:
- Data accessibility at point of engagement.
The listing and buyer data needed for routing decisions must be available to the insurance orchestration layer at the moment a customer enters a quote journey – not in batch, not via a manual handoff, but as a live signal. Platforms that have built tight data linkages between their core product database and their insurance flow are structurally ahead of those where insurance sits as a separate, loosely integrated module. - Carrier panel depth and differentiation.
Routing logic requires options to route to. A panel of carriers with meaningfully differentiated product strengths – one optimised for high-value transactions, another for high-volume lower-value inventory, a third for specific risk profiles or buyer segments – creates the range of outcomes that makes routing commercially meaningful. A panel that is broad in name but undifferentiated in product fit provides the infrastructure of choice without the substance. - API-level carrier integration.
Routing decisions need to be executed, not just modelled. This requires real-time API connectivity with carrier pricing engines, the ability to ingest live quote responses, and a quote journey that presents the output natively within the platform experience. The orchestration layer must be able to initiate multiple quote requests simultaneously, rank results, and surface the most competitive option – ideally without the customer being aware of the routing logic operating underneath.
The framing worth applying
For executives running digital marketplaces with significant transaction volume, the relevant question is not whether embedded insurance is an opportunity. The market evidence on that is settled. The embedded insurance market is projected to exceed $700 billion globally by 2030, according to InsTech London’s 2023 market sizing research – with marketplaces and digital platforms representing the fastest-growing distribution channel.
The relevant question is whether the insurance experience a platform offers today is matched to its inventory with enough precision to convert at the rate the underlying intent warrants.
Most platforms, assessed honestly against that standard, are not there yet. Not because the commercial case is unclear. Not because the data is unavailable. But because the orchestration layer that connects what a platform knows to what it presents has not yet been built as a priority.
That is an architectural decision. And like most architectural decisions, the cost of deferring it compounds – in conversion rates left below potential, in carrier relationships that remain less commercial than they could be, and in a revenue line that stays supplementary when the data and the intent exist to make it structural.
Protection as infrastructure, not placement
The platforms that will establish durable advantages in embedded insurance are not those that treat it as a feature to be configured once and monitored occasionally. They are those that treat it as infrastructure – a connected, data-responsive capability that improves its own performance over time as routing signals accumulate and carrier relationships deepen.
Conversion data improves routing. Better routing generates richer conversion data. Carrier relationships strengthen as volume and attribution clarity increase. The commercial model becomes more instrumented, more defensible, and more scalable.
The transition from placement to infrastructure does not require new customer data, a rebuilt quote journey, or a complete rearchitecting of existing systems. It requires connecting what a platform already knows to an orchestration layer capable of acting on it continuously – and building the carrier panel depth to give that routing logic something to work with.
That is the architecture worth designing for. And the time to design for it is before the current approach’s ceiling becomes the dominant constraint.
About Kanopi
Kanopi is a modular, full-stack insurance orchestration platform for insurers, MGAs, and digital distribution platforms. If you are evaluating how to build intelligent routing and carrier management into your customer journey, we would welcome the conversation.
Book a structured walkthrough or see how embedded insurance fits your platform at kanopi.com.