By 2030, the U.S. embedded insurance market could exceed USD 40 billion, while embedded lending continues to accelerate through Buy Now, Pay Later and integrated working capital solutions. Both models are redefining how financial products are delivered, powered by API-first architectures that bring services directly into the platforms people and businesses already use.

How embedded products change the customer journey

Embedded insurance and lending place financial services at the exact moment of need—without redirecting users to separate banking or insurance portals. APIs make it possible to integrate these products into non-financial platforms, from retail checkout flows to SaaS dashboards and industrial marketplaces.

For insurance, this might mean travel coverage offered at booking confirmation or accident protection in a rideshare app. For lending, it could be instant BNPL approval in e-commerce or working capital embedded in a supplier’s ERP, cutting funding times from weeks to hours. In both cases, the process is fully contained within the original platform, with no duplicate data entry or extra steps.

The role of API-first banking

These models rely on API-first banks that design their infrastructure around modular, secure APIs from the start—not as an afterthought. This approach allows faster integrations, supports real-time data exchange, and scales across multiple platforms. Businesses can launch financial products in weeks instead of months, while users receive personalized offers that feel like part of the core service.

Why companies are investing in embedded finance

Embedding insurance and lending services into digital platforms offers multiple benefits for businesses and consumers:

• Convenience and personalization: Financial services become part of routine interactions, improving adoption and satisfaction.
• New revenue streams: Platforms monetize through embedded services without disrupting their primary business.
• Operational efficiency: Automated workflows and data-driven risk models reduce cost and improve performance.
• Compliance coverage: Partnering with licensed banks and BaaS providers keeps regulatory risk manageable.

Advances such as AI-driven underwriting, IoT-based parametric insurance, and event-driven architectures are pushing these products toward even greater responsiveness. For lenders, integrating payment protection directly into loan offers has been shown to lower delinquency and charge-off rates while improving customer retention.

Market outlook

In 2023, the U.S. embedded finance market was valued at USD 15.36 billion, with a projected CAGR of 32% through 2030. Embedded lending is set to grow fastest, driven by BNPL adoption and B2B credit integration. Embedded insurance is poised to transform distribution by shifting sales to digital channels, reducing reliance on agents, and opening access to untapped customer segments.

Strategic takeaway

Embedded insurance and lending represent a high-growth frontier for API-first financial products. They work best when integrated invisibly into digital journeys, creating value for users and unlocking scalable revenue for businesses. Companies that act early, partnering with API-first banks and aligning products to real user contexts, will be better positioned to lead as this market moves toward its next growth phase.

Luby partners with banks, fintechs, and platforms in the U.S. to design and build API‑first embedded finance products. We handle product design, secure integrations with cores and BaaS partners, and compliance. Let’s talk about how to bring embedded insurance or lending to market with speed, scale, and U.S. regulatory confidence.