This month, Zurich Australia and Mercedes-Benz Financial Services launched Mercedes-Benz Elite Motor Insurance, embedding bespoke cover directly into the Mercedes purchase and ownership experience. It is another marker of a broader industry shift that doesn't rely on brokers in distribution. Bentley Financial Services this year introduced embedded insurance in partnership with Chubb. Stellantis - owner of Chrysler, Dodge, Jeep, Ram, Fiat and Alfa Romeo - embedded insurance through insurtech firm Bolt across North America. Jaguar Land Rover has partnered with Liberty Mutual. Zurich is also a Tesla favourite for bespoke insurance across multiple markets.
The latest Zurich Australia product follows the model of other embedded counterparts and is distributed through the carmakers' authorised agents. These new motor vehicle offerings could represent a fundamental reshaping of how insurance reaches high-net-worth (HNW) car buyers - an explicit challenge to brokers. According to some industry estimates, the embedded insurance market is forecast to reach more than US$1 trillion in global gross written premiums (GWP) by 2033, with luxury automotive likely to be a fast-growing segment.
For Alex Morgan, head of general insurance at Zurich Australia and New Zealand, the new cover is a response to customer demands. "Customers are increasingly seeking offerings that are seamless, digital and integrated within the vehicle purchase journey," he said. "There is also increasing demand for tailored insurance propositions that are aligned to a vehicle manufacturer's brand and specifications."
An estimated 81% of millennials and Gen Z desire the option to purchase auto insurance as part of their car buying experience, with 83% reporting they purchased some type of embedded insurance with a recent purchase. Dealership data supports the business case: dealers who introduced insurance quotes into the sales process saw an average 20% lift in finance and insurance gross profit - an extra $313 per deal - with policy purchases delivering a 31% lift, or $501 more per transaction.
For luxury vehicle buyers, the appeal compounds. A Mercedes-AMG or Bentley requires specialist knowledge. Repairs demand authorised networks. EV features - battery management, charging equipment, software vulnerabilities - require underwriting sophistication that standard comprehensive policies may not address. Embedding insurance into the dealer experience eliminates friction for the customer and ensures coverage is precisely aligned to the vehicle's specifications.
Yet the apparent simplicity masks substantial underwriting challenges. These are not routine motor products.
Morgan points to the core complexity: "Developing these propositions is more about meeting the specific and evolving customer needs of the vehicle manufacturer," he said. "The proposition needs to appropriately cover any unique features of the brand's car models, integrate with the existing customer experience and distribution channels, and utilise the brand's repair networks and agents."
That requirement for integration means insurers are not simply writing policies, they are embedding themselves into manufacturer ecosystems. Zurich's "Edge" platform, for example, is a region-wide digital infrastructure deployed since 2024 that integrates across the entire insurance value chain from sales and servicing to claims management. Mercedes-Benz Elite leverages Zurich's proprietary underwriting technology to automate approval and streamline the quote-to-bind process within the dealership flow.
EV-specific underwriting compounds the challenge. Luxury brands including Bentley are introducing embedded insurance products that customise coverage for both new and pre-owned vehicles, requiring partnerships with specialists like Chubb for underwriting and brokers like Carbon Insurance for administration and claims management. Battery degradation, charging infrastructure risk, software updates affecting vehicle performance – these represent underwriting frontiers that insurers and brokers are still mapping.
The question facing brokers is not whether embedded insurance will grow - the data answers that - but where value flows in an embedded world.
Traditional motor broking - comparing quotes, advising clients on coverage options, managing renewals - gives brokers agency. Embedded models change that and instead, in motor, have the carmaker controlling access and the insurer part of the embedded infrastructure.
When original equipment manufacturers (OEMs) embed insurance, they typically partner with major insurance providers rather than compete directly; partnerships with dealers, major insurers, and insurtech firms remain the primary distribution model rather than dealership-led direct sales. This creates two tiers of broker opportunity.
First-tier brokers may partner with carmakers - similar to how Chubb and Carbon have done with Bentley - to build, underwrite and service embedded products. This requires scale, technology capability, and specialist motor expertise. Second-tier brokers retain value in advising customers on supplemental or non-embedded cover - agreed value add-ons, specialty liability, heritage vehicle coverage - where broker judgment still matters.
But the middle ground - standard comprehensive motor broking for high-value vehicles - is contracting. Brokers competing in that space must differentiate on specialist knowledge, claims advocacy, or integration partnerships they can offer clients.
This reflects a global pattern extending beyond luxury vehicles. Stellantis embedding insurance via Bolt in North America. Jaguar Land Rover's Liberty Mutual arrangement. Toyota's Toggle partnership. The model is replicating across market segments.
For brokers, the strategic questions are clear: Will you partner with manufacturers and insurers to build embedded products? Will you position as a specialist underwriter or claims advisor for non-embedded cover? Or will you expand into adjacent services - fleet management, risk consulting, alternative risk transfer - where distribution is less algorithmic?
None of these answers are straightforward. But as Zurich's partnership with Mercedes makes clear, the decision cannot wait. The embedded vehicle insurance market is moving from trend to standard practice and brokers must move with it.
