Embedded or transactional? The insurance model driving growth for banks and fintechs in 2026

Insurance is proving itself to be a core growth engine for banks and fintechs alike. As digital platforms mature, the opportunity to pair financial services with smart, seamless protection is too big to ignore.

Embedded insurance helps close the protection gap and boost customer loyalty by offering cover at no extra cost, while transactional programs give brands room to create more personalised products with stronger margins.

We’ve seen fintechs start to transition from embedded to transactional as they’re looking to increase revenue, while banks are moving from traditional bancassurance to embedded to keep up with fintechs.

Both have their advantages, but different considerations to make them work.

Sebastian De Zulueta, Head of Digital Business EMEA at Chubb, brought the carrier perspective, sharing how digital-native brands like Monzo approach insurance. Hugues Hénin, Head Of International Business Development and Partnerships at Crédit Agricole Assurances, explained how a major bancassurance group balances trust, service quality and digitalisation. And Fernando Terrés, Co-founder and CEO of DolarApp, gave a fintech view on using insurance to create value and drive revenue.

Guided by our Head of Business Development Guillaume Roux, the conversation explored what it really takes to build an insurance strategy that works – and how banks and fintechs can scale these programs with confidence.

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Watch the full webinar replay → 

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Why insurance matters for banks and fintechs

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Bancassurance is a $2.5 trillion market, and digital platforms are giving banks and fintechs the chance to tap into this vast opportunity.

These platforms act as a new distribution layer, offering a range of benefits to customers. As businesses move to digital-first models, insurance is no longer just an add-on; it’s a strategic focus that can unlock new value.

For banks and fintechs, success lies in understanding customer needs and leveraging technology to deliver better products and experiences.

‘You can solve actual problems with insurance products. The banks or fintechs that are getting this right are really marketing this effectively; they've sliced the data; and they've got a really good understanding of who they want to target and why and with what. The other side of that is, of course, how you can actually use the digital revolution to add value in addition to the product: the customer experience, the way they claim is paid, etc. There's so much opportunity to build better products, better experiences.’ – Sebastian De Zulueta, Head of Digital Business EMEA at Chubb

As Sebastian shared, the key challenge is no longer distribution, but figuring out how to build products that truly solve problems for customers while keeping costs down.

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The pitfalls of bundled insurance for banks – and how to get it right → 

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Approaches to embedded vs. transactional insurance for banks and fintechs

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Banks and fintechs often take two different approaches to offering insurance. The first, NAC (non-additional cost) programs, involves embedding insurance by default into a package, account or card. In this setup, the cost of insurance is covered by the bank or fintech, and customers receive it as part of their product offering.

This approach can be highly attractive to customers, as it requires no extra cost and helps to close the protection gap for those who may not have bought insurance otherwise.

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The 7 most popular embedded insurance products for banks and fintechs →

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The second approach, transactional insurance programs, offers insurance as an optional add-on. These programs allow banks and fintechs to cross-sell individual policies, usually with a pricing model tailored to each customer.

While these programs can generate more revenue through commissions, they come with the challenge of ensuring good conversion rates and offering the right product at the right time.

‘We're primarily a bank, and our first objective is to get new customers and make the best of the customer base we have. The hook is the banking offering, and then comes the insurance equipment strategy, which is linked to the customer experience. A large part of our customers see us as legitimate because we provide top-of-the-range products, they trust us with long-term relationships and they know their claims will be taken care of fairly. For us, the question is not NAC or non-NAC, because embedded products are low-cost and attractive, while transactional products are more engaging and protect business, family and property. This requires more commitment from customers, which is why transactional business is our focus today.’ – Hugues Hénin, Head Of International Business Development and Partnerships at Crédit Agricole Assurances

‘If a company wants to sell transactional voluntary products, they need a strategic investment and a long plan because there is a lot of expertise required. The most successful programs are driven by insurance executives inside the organisation, especially in tech. There is a lot of stakeholder management, and having that person is a clear indication of whether a program will be successful. When companies try to do it without someone internally driving it, it generally doesn’t succeed because it requires too much. It is a business unit within the business, and it needs someone to lead it. If you half-ass it, it’s not going to work.’ – Sebastian De Zulueta, Head of Digital Business EMEA at Chubb

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Navigating the shift from embedded to transactional insurance programs

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Fintechs face two main challenges when offering insurance: creating new value for customers and expanding their share of wallet. Both strategies are effective, with companies like Robinhood and Revolut using insurance as an additional product to generate revenue without necessarily growing their customer base.

Insurance isn’t just a nice-to-have – it's an integral part of the customer journey that can help fintechs stand out.

When fintechs start their insurance journey, they often begin with embedding no-cost insurance as part of a package. As they scale, they tend to shift towards transactional programs, offering more personalised, higher-margin insurance products.

This shift is a natural progression as fintechs establish deeper customer relationships, allowing them to cross-sell products like life or travel insurance.

However, the transition isn’t always easy. Fintechs need to balance product complexity with customer needs. Offering too many products can overwhelm customers, while offering too few can limit potential revenue. The key is to offer a few products that genuinely meet customer needs at the right time.

‘My simple advice is: don’t ever think about it as a transition. If you think about a transition, it means you didn’t have conviction about insurance and only got it through a NAC experiment. The right way to think about it is whether you can solve a product for the customer, because capabilities only kick in at scale. A fintech doesn’t have the same cross-sell capacity as a bank with mortgages, but a fintech focused on credit cards for electronics is well positioned for a transactional sale. It’s not a transition – it’s about your capabilities, and scale lets you provide much more value to the customer.’ – Fernando Terrés, Co-founder and CEO of DolarApp

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Hear from more experts: why bancassurance is so hard to get right →

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The future of insurance for banks and fintechs

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Looking ahead, the future of insurance in the banking and fintech spaces is bright. As fintechs scale, they’ll be able to offer more transactional insurance products, tapping into new revenue streams.

Sebastian predicts a trillion-dollar market for insurance in the fintech space in the next 30 years, with AI playing a pivotal role in automating and optimising insurance sales and claims.

For banks like Crédit Agricole Assurances, the challenge is ensuring that insurance becomes an integrated part of their broader product offering. Hugues emphasised the importance of product innovation and digitalisation, especially as customers expect more seamless, digital-first experiences.

Fernando added a compelling perspective on what happens as fintechs mature. Transactional insurance will become more competitive and innovation will become more important. 

As he put it, ‘Consumers will be the ones winning because we'll have the ability to disrupt in those areas.’

Ultimately, the future of insurance in financial services isn’t just about technology. It’s about offering relevant coverage, maintaining trust and ensuring quality service.