Canada: Growing embedded insurance industry attracts FinTechs

By Puja Sharma

Businesses across industry verticals are partnering with embedded insurance providers to grow their market share in Canada. There has also been an increase in mergers and acquisitions among market players in the embedded insurance market to gain a competitive advantage.

A major factor driving the rapid growth of embedded insurance in Canada over the past four quarters was the global pandemic. As a result, InsurTech firms are raising funds to increase their growth and distribution network in Canada, as per the survey by ResearchandMarkets.

Embedded Finance is expected to grow by 42.5% on an annual basis, reaching US$4,700.8 million in 2022, according to the Q4 2021 Embedded Finance Survey. Over the forecast period, the embedded finance industry is expected to grow at a CAGR of 25.2% between 2022 and 2029. By 2029, embedded finance revenues in the country will rise from $4,700.8m to $15,878.2m.

In January 2021, Apollo Insurance Solutions raised $10.6m. Additionally, with the growing success of InsurTech startups in Canada, they are now looking to expand into the United States. During the next four to eight quarters, the publisher expects further growth in funding activities in Canada.

Businesses across industry verticals are partnering with embedded insurance providers to grow their market share in Canada. There has also been an increase in mergers and acquisitions among market players in the embedded insurance market to gain a competitive advantage.

There is a lag behind innovation in the commercial insurance sector, while both InsurTech startups and incumbent insurers in the personal insurance sector are innovating. Within the next four to eight quarters, the commercial insurance space in Canada will see much more innovation.

Globally, the pandemic has boosted embedded lending, and Canada is no exception. To take advantage of the embedded lending industry’s strong growth potential in the country, FinTech companies are raising funding to increase their expansion and expansion of their distribution networks.

Within the next four to eight quarters, the funding for this sector is expected to grow even more in Canada. Moreover, market players are investing in introducing innovative products and the newest technologies, which will serve as further catalysts for market expansion.

Furthermore, the substantial reliance of SMEs on informal sources of financing and loans is indicative of a significant issue in Canada’s financing system. Market players have an opportunity to fill this gap through innovative embedded lending offerings.

Canada-based e-commerce platform Shopify has already leveraged the opportunity by introducing Shopify Capital for its merchants in Canada. It is is making efforts to fill the funding gap in the country and provide enhanced experiences to its merchants. The publisher projects an increased number of e-commerce platforms to offer embedded lending to take advantage of the enormous growth opportunity prevailing in the e-commerce market in Canada.

FinTech firms are raising funds to accelerate their growth and expand their foothold in the embedded payment industry. Furthermore, FinTech firms are planning to take advantage of the payment industry’s strong growth potential in Canada. Consequently, the publisher expects fundraising activities are expected to grow further in Canada in the forthcoming quarters.

In October 2021, European payment provider Worldline partnered with Canada-based live shopping solution provider Livescale. Under this collaboration, the companies will provide an embedded commerce solution with in-video checkout features that will work across social media and websites.

The market players are also making efforts to introduce innovative offerings and the latest technologies in the sector, which is anticipated to fuel the market growth in 2022. International embedded payment providers are also eyeing the growing opportunity in the region. These companies are joining hands with Canadian firms to introduce their offerings to Canadian clients.