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Insurance partnerships can create revenue by reaching customers through a relevant partner, offering suitable cover within a purchase journey, or providing technology and services to an insurer. The durable approach is to start with a real customer risk, make each party’s role and the cover understandable, preserve meaningful choice, and oversee incentives and outcomes across the full distribution chain. Revenue and conversion matter—but they are not enough to show that a partnership is working.
How do insurance partnerships make money?
A partnership can earn revenue from distribution, technology or service provision, or both. The right structure depends on what each party actually does: introducing a customer is not necessarily the same activity as recommending, arranging or selling a policy. That distinction can affect which local rules apply and who must be registered or authorized.
| Partnership model | How revenue may arise | Key trust and operating question |
|---|---|---|
| Distribution or affinity partnership | A broker, agent, retailer, lender, travel provider or other partner reaches customers for an insurer. Remuneration may be commission or another agreed payment; the arrangement and applicable rules determine the details. | Is the partner only referring customers, or is it carrying out regulated distribution such as advising or arranging? Who explains the cover and handles service? |
| Embedded or ancillary cover | Insurance is offered during a related purchase, such as travel cover in a travel journey or GAP cover alongside a vehicle purchase. A relevant journey may improve access to an offer, but does not by itself establish that the cover is suitable. | Can customers understand the separate insurance offer, its price and limits, and decline it without losing access to the non-insurance product or service? |
| Technology or service partnership | A platform or service provider may support customer access, administration, underwriting workflows or other insurer operations. EIOPA’s 2020 discussion of platform models also describes transaction or brokering fees and advertising fees as possible platform economics—not as a current market benchmark. | Does the customer know whether the provider is a technology supplier, distributor or insurer? Who owns each customer-facing task, and what data and platform dependencies does the arrangement create? |
The Bank for International Settlements Financial Stability Institute examined big-tech insurance activity across 14 jurisdictions in 2023. Its analysis described technology service provision as a significant form of big-tech presence, while regulated carrier and intermediary activity was limited at that time. This is a dated, cross-jurisdictional snapshot, not evidence that every technology partner has the same role or that a provider is licensed to sell or underwrite insurance.
How do you grow insurance revenue without losing customer trust?
Build the partnership around customer value first, then test whether its economics support that value. In the EU, the Insurance Distribution Directive (IDD) requires distributors to act honestly, fairly and professionally in customers’ best interests. It also bars remuneration and sales-target arrangements that conflict with that duty. The IDD is not a universal rulebook: obligations depend on jurisdiction, product and the activities each party performs.
1. Identify the customer need and the product’s limits
Specify the customers the offer is meant for, the risk it addresses, important exclusions and limitations, and how a customer can judge whether the cover fits. The IDD requires an EU distributor to assess a customer’s demands and needs and provide comprehensible, objective product information before a contract is concluded. Any proposed contract must be consistent with those demands and needs; where advice is given, the distributor must explain why the recommendation fits.
Do not treat a purchase context as proof of relevance. The UK Financial Conduct Authority’s 2019 review of general-insurance distribution chains examined travel, tradesman and GAP/motor ancillary insurance. It identified potential excessive pricing and unsuitable products, including concerns where insurance was linked to a non-financial purchase, and connected potential harms with weak customer focus and governance.
2. Make the offer and each party’s role clear
Customers should be able to tell when they are seeing insurance marketing, who the insurer is, who is distributing the product, and whether another business is only providing technology or making a referral. Under the EU IDD, marketing communications must be clearly identifiable as such. EIOPA has also cautioned that roles within digital ecosystems can be difficult for customers to distinguish.
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Use that clarity throughout the journey—not just in a legal notice. The invitation to buy, policy information, handoff to the insurer, servicing route and claims instructions should not leave customers guessing which business is responsible for the next step.
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3. Preserve choice and explain the price
Where an insurance product is packaged with a non-insurance product or service, the EU IDD requires information about whether the components can be bought separately and the costs of each component, subject to exceptions in the Directive. Do not assume this rule applies identically outside the EU or to every arrangement; establish the applicable rule for the product and market.
As a commercial design principle, make it easy to decline insurance and avoid presenting optional cover as if it were necessary to complete the underlying purchase. Explain price and material coverage limits in a way customers can understand before they decide.
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4. Test the incentives, not just the headline commission
Review every way the arrangement rewards behaviour: commission, volume bonuses, profit share, employee targets, paid placement or ranking. Ask whether the structure could encourage staff or a platform to push cover that is a poor fit, favor one insurer without a customer-relevant reason, or obscure a less expensive or more suitable alternative. The EU IDD’s conflict rule applies to remuneration and sales targets; the precise requirements elsewhere depend on local law and the parties’ roles.
EIOPA’s 30 March 2026 summary of its Third Report on IDD application said that misaligned incentives and insufficient transparency remained consumer-protection threats in some markets, particularly in life and credit-protection insurance. It also said some national authorities were considering further commission restrictions or disclosure. That finding signals an ongoing issue, not a blanket prohibition on commission.
5. Govern the complete distribution chain
Set out who approves the product and customer journey, who trains staff, who handles sales and servicing, how complaints and claims are routed, and how the insurer checks delegated work. Review scripts, digital screens, customer communications and the partner’s remuneration. Monitor whether actual distribution costs remain proportionate to the value delivered.
The FCA’s 2019 review found potential harms associated with poor oversight and insufficient customer focus in general-insurance chains. Its lesson for a partnership is operational: contractual allocation alone is not enough if no one checks what customers experience in practice.
What should an embedded insurance partner disclose?
Disclosure should let a customer make an informed decision at the point it matters. The exact mandatory wording and scope vary by market and product, but a useful customer-facing explanation should make these points easy to find:
- That the offer is insurance, and whether it is optional.
- Which business is the insurer, which is distributing or arranging the policy, and which—if any—is providing technology or only making a referral.
- The premium or component price, the material cover, and significant exclusions or limitations.
- Whether the insurance and the non-insurance product or service can be purchased separately where the applicable rules require that information.
- How to obtain policy information, ask questions, cancel where applicable, make a claim or complain.
Disclosure does not repair a confusing or unsuitable product. Check the journey itself: customers should have enough time and information to understand what they are buying before they commit.
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Compare proposed arrangements using the same decision criteria rather than ranking them by reach or projected conversion alone.
| Decision area | Questions to resolve | Evidence to request |
|---|---|---|
| Customer relevance | What identifiable risk does the cover address in this customer journey? Who is outside the intended target market? | Target-market definition, product terms, exclusions and a clear account of why the offer fits the audience. |
| Role and regulation | Is each party a technology provider, referrer, intermediary, insurer or co-manufacturer in this arrangement? Which local rules apply to those activities? | Activity map, responsibility matrix and confirmation of applicable registration or authorization requirements. |
| Revenue and incentives | Who is paid, on what basis, and could payment affect advice, placement, ranking or employee behaviour? | Full remuneration design, including bonuses and non-cash incentives, plus a conflict review and mitigation plan. |
| Customer value and transparency | Can a customer understand the price, cover, exclusions, partner roles and ability to decline or buy separately where relevant? | Customer-facing screens, scripts, policy information and usability or comprehension checks. |
| Operational accountability | Who owns sales, service, complaints and claims handoffs? How will the insurer oversee work done by partners? | Named owners, service processes, escalation routes, audit rights and reporting arrangements. |
| Data and platform dependence | What information is collected or shared? Can customers compare alternatives, and can either party change providers? | Data-use terms, access and portability provisions, ranking criteria and an exit plan. |
EIOPA’s 2020 discussion paper on digitalisation and insurance value chains flagged platform risks that include biased rankings, reduced comparability, lock-in and dependency. Addressing data access, ranking rules, portability and exit rights in the partnership design can reduce the chance that the platform’s commercial position silently shapes customer choice.
What should a partnership measure after launch?
Measure revenue and conversion alongside indicators of whether customers understand the offer and receive the service they were promised. The following are practical operating measures, not a regulator-prescribed list in the cited sources:
- Complaints, cancellation and lapse patterns, segmented by product, channel and customer group.
- Claim acceptance, time to decision, handling quality and reasons for declined claims.
- Suitability exceptions, sales outside the intended target market and recurring coverage gaps.
- Customer comprehension of price, optionality, exclusions, partner roles and claims routes.
- Total distribution cost compared with the cover and service delivered to customers.
- Differences in outcomes across partner channels, including whether rankings or incentives appear to steer customers toward particular offers.
Set owners, review intervals and thresholds for investigation before launch. A rise in sales is not, by itself, evidence that customers are benefiting; investigate adverse signals and be prepared to change the journey, incentives or product.
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EIOPA’s market-structure summary, published 30 March 2026, reported a 7.5% decline in registered insurance intermediaries in the EU from 2020 to 2024. It reported that commissions were prevalent in 24 Member States in 2024, fees in one, and a combination of commissions and fees in three. EIOPA cautions that national registration categories and data-collection approaches differ, so these figures describe market structure and reported remuneration patterns—not the quality of a partnership or proof that any model produces more revenue or customer trust.
The figures are useful context when planning distribution, but they do not answer whether a particular partner, commission arrangement or embedded offer is right for a customer. That requires market-specific legal analysis and evidence from the partnership’s own product and customer outcomes.
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