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With revenues of 140 billion USD in 2024 and an average annual growth rate of 9.9%, affinity insurance is one of the most dynamic segments of the insurance market.
Driven by rising consumption and technological developments, this niche represents a new growth driver for insurers; and has become a major strategic issue for the market.
Affinity insurance is generally offered by commercial companies when selling goods or services. It offers consumers a wide range of solutions covering many sectors, such as telephony, household appliances, mobility, travel, leisure, and payment methods. Its purpose is to protect the insured against specific risks associated with their daily lives.
Despite promising growth prospects, this activity is currently facing recurring criticism that is undermining consumer confidence. Consumer complaints particularly focus on hard-selling practices, a lack of transparency, redundant coverage and, even more seriously, fraudulent charges linked to non-existent guarantees.
This raises the question: how can the economic opportunities offered by this segment be reconciled with consumer protection against potential abuses?
Affinity insurance: definition
Affinity insurance, also known as B2B2C (1) insurance or “embedded insurance,” is defined as an optional service offered to a customer at the time of purchase of a product or service.
Unlike traditional policies, it is distributed not by an insurer network, but by a third-party partner, such as a store, e-merchant, travel agency, start-up, or any other commercial operator.
This model has been designed to cover specific risks related to the product and its use, such as breakage, theft, loss, or breakdown. Such risks are not generally covered by the legal warranty or manufacturer's warranty.
(1) An insurer (B) relies on a distributor or partner (B) to offer insurance to the end customer (C): Business-to-Business-to-Consumer
Affinity insurance: origin and evolution
Affinity insurance has evolved considerably since its early experiments in the motor industry. It has gradually expanded its scope to credit insurance before embracing digitalization.
Each phase of its evolution illustrates the market's ability to adapt to the products and services of its time. Today, affinity insurance plays an important role in building user loyalty and generating revenue for insurers.
Originally focused on covering risks related solely to material goods (breakage, theft, etc.), affinity insurance has gradually expanded its scope of action, including services such as assistance and cyber security.
Key dates
1920s
To make it easier for customers to purchase their vehicles, General Motors started offering them insurance solutions linked to their purchase.
This marks the beginning of the integration of insurance into the marketing process for a main product.
1925
Zurich became the official insurer for new Ford vehicles in the United Kingdom.
This partnership established a direct link between the purchase of a vehicle and the granting of a reduction in the insurance premium, thus introducing one of the first forms of affinity insurance.
1960s
In the United States, the automotive industry saw the emergence of “extended warranties.”
Marketed directly by third-party companies to dealers, these supplementary insurance policies respond to the increasing complexity of vehicles and consumer demand for long-term coverage.
1964
Patrick Ryan established Pat Ryan & Associates Co., a company based in Chicago, United States.
The company specializes in motor credit insurance sold directly by dealerships. This innovative partnership between a credit intermediary and auto dealerships enabled Pat Ryan & Associates to make insurance history.
A few years later, Pat Ryan & Associates changed its name to Ryan Insurance Group. The latter subsequently merged with Combined International Corporation, an insurance holding company, to set up Aon Corp in 1982, an Anglo-American group that is currently the world leader in insurance brokerage with 50 000 employees, 500 offices in more than 120 countries, and revenues of 15.7 billion USD in 2024.
1965
The French group Société de Prévoyance Bancaire (SPB) was established. Currently the European leader in affinity insurance, SPB designs and manages insurance and assistance offerings for everyday products and services in five key sectors: banking, retail, telecommunications, travel, and automotive. The group is present in 12 European countries.
1970s
The concept of affinity insurance developed alongside the rise of bancassurance. Banks began offering insurance to their customers, often in conjunction with financial services (credit cards, loans). This marked the beginning of affinity bancassurance. Insurance became an additional service offered to build customer loyalty.
1980s
Previously focused on credit insurance, the affinity insurance market has gradually diversified.
In the early 1980s, equipment and service distributors began offering new coverage for everyday consumer goods and a wide range of services.
This model, often perceived as a value-added service for customers, also became a source of revenue for distributors and insurers.
1990s-2000s
Some companies began to specialize exclusively in designing and managing affinity insurance programs for other organizations.
This is the case with Société Française d'Assurance Mobile (Sfam). Set up in France in 1999, the company was one of the market's pioneers, particularly in mobile phone insurance.
Accused of deceptive business practices, excessive charges, and forced insurance sales, Sfam was placed into liquidation in April 2024 and its executives were brought to justice.
2010s
Affinity insurance experienced sustained growth, driven by the rise of digital technology. It was no longer only offered in stores, but directly integrated, or “embedded,” into the online shopping experience thanks to a simple and seamless underwriting process.
Startups and technology players invested heavily in the digitization of this activity.
Characteristics of affinity insurance
Offered upon purchase, affinity insurance supervises the marketing of a wide range of goods and services: high-tech equipment (smartphones, computers), household appliances, ticketing, events, and travel.
It differs from traditional insurance in its distribution, customer relations, the nature of the product proposed and in terms of the simplicity of its underwriting procedures.
1. Distribution channel: affinity insurance is generally provided through distribution partners such as stores, e-retailers, online platforms, or travel agencies.
2. Customer relationship: established primarily with the distributor, that relies on the existing relationship of trust with its customers to offer the insurance product.
3. The product: is designed specifically to cover risks and unforeseen events related to the goods and services sold by the distributor.
4. Simple procedures: the underwriting process is quick and easy, generally requiring no active involvement on the part of the customer.
Affinity insurance and extended warranty
It is important to distinguish between affinity insurance and the extended warranty offered by the manufacturer. The latter is generally limited to extending the initial coverage of the product against certain breakdowns or failures.
Affinity insurance, on the other hand, is an independent contract designed to accompany the purchase and protect the buyer against risks related to the use of the product or service. Thanks to its design, distribution method, and the role of the distributor, affinity insurance is more flexible and well suited to the real needs of consumers.
The difference between affinity insurance and coverage extension
| Affinity insurance | Coverage extension | |
| Provider | Insurer via non-insurance distributors (e.g., high-tech stores) | Manufacturer, distributor, or third party |
| Nature of coverage | Offers broader protection against external risks | Extends the manufacturer's coverage |
| Contract duration | Flexible duration, renewable via subscription as long as contributions are paid | Limited duration, contractually fixed, often non-renewable |
| Payment method | Regular payment: monthly, quarterly, or yearly | One-time payment, usually at the time of purchase |
| Type of risks covered | Accidents and external hazards (breakage, theft, loss, cancellation, etc.) | Technical failures and manufacturing defects |
Affinity insurance market players
Affinity insurance relies on a broad ecosystem bringing together insurers, brokers, affinity partners (distributors, e-commerce platforms, start-ups, insurtechs, etc.) and consumers.
What may seem like a simple insurance policy offered at the time of purchase is actually a structured organization involving several interconnected players.
From product creation to marketing, each player has a specific role:
► The insurer is responsible for designing coverage, setting rates, and paying claims. Examples of insurers include major groups such as Allianz Partners (Germany), AIG (United States), Zurich (Switzerland), and CNP Assurances (France).
► The broker acts as an intermediary, liaising between the various parties, structuring programs, and often managing claims on behalf of partners.
► Affinity partners may include banks, retail chains, e-merchants, associations, start-ups, etc. The affinity partner is the direct point of contact with the customer and markets the insurance products.
Examples of insurtech partners include Bolttech (1), Cover Genius (2), and Simplesurance (3).
These partners provide significant operational efficiency through the automation of underwriting and claims processing.
Distributors or retailers (4), telephone operators, and travel agencies also play a central role in the sales process.
These distributors directly integrate the coverage underwritten at the time of payment. This discreet but effective “embedded” insurance is, in part, behind the strong growth of the sector.
In Europe, most sales are now made through this integrated channel, which allows goods or services to be insured without any additional steps.
(1) Bolttech: insurtech specializing in embedded insurance. Founded in 2020, Bolttech is based in Singapore and operates in 39 markets across four continents.
(2) Cover Genius: insurtech specializing in embedded protection. Established in 2014, Cover Genius is based in Sydney, Australia, and operates in 60 countries. Cover Genius has developed Xcover, a global distribution platform.
(3) Simplesurance: European insurtech company was set up in Berlin in 2012. It positions itself as a platform that facilitates access to personalized insurance in a simple and digital way. Simplesurance was acquired by the Allianz Group in 2022.
(4) Retail
► The customer, who purchases the plan is the last link in the chain. Their decision hinges on the trust they place in the affinity partner and their perception of the added value of the offer.
Examples of partnerships
Below are some concrete and representative examples of collaboration:
In motor insurance: Tesla offers its European customers the “InsureMyTesla” program, which provides coverage tailored to electric vehicles. This insurance is underwritten in Europe by Helvetia and administered by Qover.
InsureMyTesla is also available in several other countries (Australia, Canada, etc.) through partnerships with local or regional insurers.
Insurance and telephony: Société Française du Radiotéléphone (SFR) offers its customers mobile insurance in partnership with Chubb. This insurance covers the risks of theft, breakage, or oxidation of the device.
Credit insurance and savings: The Crédit Agricole group works with several banks in eight countries to offer savings and credit insurance products.
Implementing an affinity plan
The implementation of an affinity insurance plan is based on a comprehensive approach, combining an understanding of customer needs, close collaboration with distribution partners, and compliance with regulatory requirements.
This approach not only ensures compliance and transparency of the scheme but also improves customer understanding and appreciation. The process revolves around six steps:
1. Identifying customer needs
This involves analyzing the uses associated with the product or service with a view to identifying the most relevant coverages: assistance, protection against breakdowns, or other specific guarantees.
2. Choosing a distribution partner
The distribution partner must be able to present a clear, useful, attractive, and accessible plan. They must also comply with the sales procedures and information requirements set out in the regulations.
3. Designing a tailor-made product
The design is based on synergy between the distributor (knowledge of customers and their needs) and the insurer (technical expertise). This collaboration makes it possible to define appropriate coverage, design products that can be easily integrated into the purchasing process, establish exclusions, and set coverage limits and prices.
4. Training sales teams
Teams in contact with customers must be able to explain the added value of the insurance product in a non-intrusive manner, ensuring that the information provided is reliable and understandable.
5. Integration of the scheme into the purchasing process
Whether offered online or in-store, the product must fit naturally into the purchasing process.
6. Compliance with transparency and regulatory requirements
The plan must be consistent with the regulations in force in each country. It includes:
- the information sheet depicting the insured's rights, in particular the right to cancel without charge within a specified period,
- a description of the cover provided, including limits, exclusions, and ceilings,
- the terms and conditions of termination
- the conditions for premium payment and contract renewal.
Affinity insurance: market size
Affinity insurance is witnessing sustained growth. According to reports by Grand View Research (1) and IMARC Group (2), the affinity segment is estimated to be worth 139.6 billion USD in 2024. It is poised to reach 258.6 billion USD by 2030, representing an average annual growth rate of 9.9%. This momentum is driven by the development of connected products, e-commerce, the spread of “embedded” insurance offers, and the widespread use of mobile devices.
At the end of 2023, the Global System for Mobile Communications (GSMA) (3) association counted 5.6 billion mobile subscribers worldwide, including 327 million in North Africa and the Middle East, representing a penetration rate of 49% of the population in this region.
It is this connected base that in turn fuels the distribution of embedded offers, accessible in just a few clicks via local operators or e-commerce platforms.
According to Grand View Research, the European affinity market is estimated to be worth 35 billion USD in 2024, with an annual growth rate of 9%. This market is likely to reach 64.9 billion USD by 2030, confirming the maturity of the model on the Old Continent.
(1) Grand View Research is a global research and consulting company.
(2) International Marketing Analysis Research and Consulting is a global market research and strategy consulting company.
(3) Global System for Mobile Communications, formerly known as the “Mobile Special Interest Group,” is an international association representing the interests of more than 750 mobile operators and manufacturers from 220 countries around the world, as well as 400 other companies in the mobile phone industry.
In North Africa and the Middle East, the development of affinity insurance is more recent but equally promising. This market is estimated to be worth 12.4 billion USD in 2024, with an estimated growth rate of 11% per year.
The mobile phone segment, the real driver of affinity insurance in the region, is expected to exceed 4 billion USD by 2029, according to IMARC Group.
Affinity insurance: sectors of activity
Affinity insurance covers a wide range of areas that can be divided into two main segments: the goods and the service markets.
The goods market
Affinity insurance covers breakage, theft, oxidation, and other damage to electronic products, household appliances, and mobile phones.
Coverage for electronic goods and household appliances remains the backbone of the market, accounting for more than 33% of affinity insurance revenues worldwide.
The mobile insurance market for phones insurance, tablets, and other portable devices is estimated to be worth 40.3 billion USD in 2024, or 28.9% (1) of the overall affinity insurance. According to IMARC Group estimates, this particularly promising segment is expected to reach 83.1 billion USD by 2033, representing an average annual growth rate of 8.4% over the 2025-2033 period.
This rapid growth is mainly driven by the high value of smartphones and their intensive use. Coverage for these goods is almost systematic, especially in mature markets.
It is worth noting that online sales of mobile warranties now account for nearly 50% of digital underwriting.
The automotive sector is also targeted by affinity insurance. Coverage includes breakdowns, assistance, sophisticated accessories, and other onboard equipment.
It is worth noting that the shift from the concept of ownership to the concept of usage (2) through all-inclusive rental and subscription packages is forcing insurers to adapt to new market conditions. As a result, new insurance solutions cover not only the vehicle but also the customer and their mobility needs.
According to Covéa Affinity (3), more than half of new vehicle sales to individuals are in fact rental or leased cars.
(1) According to Grand View Research.
(2) Ownership for use or the usage economy refers to an economic model in which the purchase of an asset is replaced by its rental or use, including associated services (maintenance, repair). This concept is particularly evident in leasing, long-term rental, and other cooperative models. Offering sustainability and flexibility, this model avoids the immobilization of significant capital and the constraints associated with traditional ownership.
(3) Covéa Affinity is the business unit specializing in affinity insurance of the French group Covéa.
The services market
As with the goods market, the service market also offers high growth potential for affinity insurance. The latter offers the rapidly developing travel, leisure, and events sector coverage for cancellation, assistance, and unexpected expenses.
Travel insurance alone was worth between 27 billion and 31 billion USD in 2024. Its annual growth rate is estimated at 15%. This segment is driven by the rise of online booking and ticketing platforms and the increasing mobility of travelers around the world.
In the field of health and well-being, affinity insurance provides policyholders with protection against physical accidents, thereby extending its scope to include safeguarding their daily lives.
Digital services, cybersecurity, protection of depositors' identities, and secure payment methods also offer significant potential for the development of affinity insurance.
The disappearance of cash and the widespread use of online payments expose banks to risks such as fraud, embezzlement, cyberattacks, etc. This has led to growing demand for protection of financial institutions and individuals.
