
The insurance landscape is undergoing a significant transformation, driven by advances in artificial intelligence (AI), Generative AI (GenAI), and advanced data analytics.
Specialty and embedded insurance are at the forefront of this change, offering new opportunities for growth and innovation. These sectors aren’t niche anymore—they’re becoming essential components of a modern, customer-first insurance strategy.
In the field of property and casualty (P&C) insurance, specialty and embedded insurance cater to highly specialized needs, each with unique and elevated risks in specific industries, professions, and assets. The demand for more customer-centric solutions is driving massive growth in these sectors, alongside greater technological and operational innovation.
Specialty and Embedded Insurance Market Growth, By the Numbers
The global specialty insurance market was valued at $104.7 billion in 2021 and is projected to reach $279 billion by 2031, with a compound annual growth rate (CAGR) of 10.6%1. This surge is fueled by the increasing demand for customized insurance solutions and the emergence of new risks requiring specialized coverage.
Meanwhile, forecasts for embedded sales of P&C insurance range from $70 billion in the US2 to $700 billion globally by 20303. Deloitte anticipates that by 2030, up to 20% of the US personal auto market may adopt embedded systems, potentially redirecting at least $50 billion in premiums away from traditional distribution channels.
A Real-World Use Case Driving New Innovation
A prime example of this auto market growth was covered at Connections 2024, Guidewire’s annual user conference for the P&C insurance industry, where Deloitte and General Motors Insurance presented a session exploring how General Motors Insurance is revolutionizing the vehicle ownership experience for its customers with support from Deloitte and Guidewire.
The presentation included lessons learned and General Motors Insurance’s approach to telematics-based personal auto policies, a reimagined claims experience as an original equipment manufacturer, and the insurance technologies enabling General Motors Insurance’s Triple Zero vision of zero crashes, zero emissions, and zero congestion. The session was a proof point in embedded insurance distribution and operations becoming an industry standard and how Guidewire and Deloitte are well poised to support carriers and customers in this journey.
The Importance of Speed to Market and Operational Efficiency
In the latest industry innovations, such as those outlined in the General Motors Insurance use case above, it’s become increasingly clear that speed to market is crucial for sustained success and profitability in specialty and embedded insurance. The ability to quickly roll out new products and updates not only allows carriers to stay ahead of market trends and respond to emerging risks, but it can help early movers gain a significant competitive advantage: enhancing coverage offerings and pricing to attract more customers and generate higher returns.
Operational efficiency is another critical factor driving growth in specialty and embedded insurance offerings. With modern software-as-a-service (SaaS) platforms, streamlined underwriting processes, and data-driven analytics transforming operations, reducing inefficiencies, and enhancing value generation, new AI and GenAI applications are helping insurers identify process bottlenecks to reduce delays and improve collaboration across departments.
Check out Deloitte’s webinar with Guidewire, “Fast, flexible, focused: New tech is transforming specialty insurance,” to explore strategies for capitalizing on the rapid growth in specialty insurance. Gain valuable insights from insurers who are already navigating this journey.
Increasingly Essential, Digitally Driven
Now is the time to capitalize on the growth opportunities in specialty and embedded insurance. By integrating the kind of forward-looking technologies we’ve explored here and adopting agile strategies, insurers can provide the responsive and customer-centric insurance experience their customers and policyholders increasingly demand.
With Deloitte’s unique perspective on the insurance industry at large,which includes IndustryAdvantage™, our $2 billion strategic investment that creates new approaches to rapidly building industry-focused solutions by leveraging domain experience, coupled with the principles of modern engineering, AI and cybersecurity, combined with our deep understanding, experience, and knowledge of the Guidewire insurance technology platform, we’re ready to help you unlock your own opportunities to drive business growth in these emerging spaces. Reach out today to get the conversation started.
Dilip Kotlapati Sekhar
Senior Manager
Deloitte Consulting LLP
dkotlapatisekhar@deloitte.com
1. https://www2.deloitte.com/us/en/pages/consulting/articles/specialty-insurance-market-growth.html
2. Conning, Inc., "Embedded insurance distribution could exceed $70 billion in premium in the US by 2030," press release, Cision, January 11, 2023.
3. Simon Torrance, “Embedded insurance: A $3 trillion market opportunity, that could also help close the protection gap,” LinkedIn, December 10, 2020.