More travel and payment businesses are opting to build embedded insurance into their platforms. The approach replaces capital-heavy annual protection with cover that sits inside the transaction flow, protecting funds at the point where the risk occurs.
This article explores how companies are using it in practice, including the exposures they face, the cover they have embedded and the results they've seen.
Embedded insurance is cover built directly into the systems businesses already operate, such as booking and payment platforms. Cover attaches to each transaction as it is processed, scales with the company's activity and is priced on live data, instead of sitting in a separate annual policy that only gets attention when something goes wrong. This approach is a natural fit for travel, payments and FX, where money changes hands before transactions can be treated as final.
Here's how companies in the travel and payments sectors are using embedded insurance:
Acquiring banks and payment institutions that process payments for travel businesses are at risk of chargeback liability when one of their merchants fails. The more traditional way to manage that risk is with rolling reserves, which hold capital back to cover much of the risk. It works, but it ties up liquidity at a time when card scheme fraud and dispute monitoring thresholds are tightening.
TMU Management worked with actuary.aero, an analytics platform serving acquirers and payment institutions in the travel sector, to solve this expensive problem. TMU provided acquirer chargeback insurance designed to protect acquirers from chargeback losses resulting from merchant insolvencies.
Integrating TMU's solution into actuary.aero's analytics platform means acquirers can now combine transaction-level risk scoring with insurance-backed financial protection. This approach changes how financial institutions assess, price and manage chargeback risk exposure, reducing the collateral they need to hold and giving them a compliant travel payments framework.
Find out more: Acquirer Chargeback Insurance: Protecting Payment Institutions From Merchant Default and Dispute Risk
Travel intermediaries collect and hold customer money before a trip takes place – this exposes them to supplier failure. Travel Counsellors, an international network of independent travel advisers, faced this risk as the party that collects and transfers client payments. If an airline collapsed, it would be exposed to stranded clients and hold financial liability, leaving them significantly out of pocket. Bonds and trust accounts offered some protection, but they weren't flexible and scalable enough for the network's needs.
TMU Management built supplier airline failure insurance into the Travel Counsellors booking system, as part of its financial failure suite. Risk is assessed automatically during a flight booking, and premiums are priced on airline credit ratings, route geography, historical performance and transaction volume. The insurance also complements existing frameworks, such as ATOL and trust and bonding regimes, and this ensures regulatory compliance across all markets.
The embedded cover reduced Travel Counsellors' exposure to airline failure, protected client funds and strengthened trust in their brand – all without making things complex for advisers. It also gave the business the underwritten backing to expand into new partnerships and markets, with claims and exposure data continually informing its underwriting.
Find out more: What is Supplier Failure Insurance and How Does It Work?
B2B settlement in travel has long endured fragmented, opaque payment methods and a wave of pandemic-era insolvencies that made suppliers very wary. As a result, many started demanding upfront payment which impacted liquidity across the entire supply chain.
Xander Pay, a B2B hotel payments platform, saw that hotels felt compelled to extend credit to agents pending post-departure settlement, and this exposed them to non-payment. On the agent's side, they were reluctant to prepay without a supplier guarantee. Letters of credit were an option, but they were expensive and didn't scale well.
Embedding travel distribution insurance into the company's payment infrastructure protected transactions against default. Hotels gained assured receivables and agents gained greater credit flexibility and room to expand their trading relationships.
Embedded insurance is also being used by companies in the travel and payments sectors to meet regulatory obligations. SimpleRefunds, a platform that helps travel providers and ticketing agents manage consumer refund entitlements compliantly, was working against protection mechanisms that were inflexible, costly and slow to execute.
TMU Management embedded insurance-backed refund protection into the SimpleRefunds platform, combining regulated underwriting with the platform's claims management technology. This type of cover protects against supplier failure, automates digital claims with immediate verification and payout and keeps refunds compliant with the Package Travel Regulations.
With this embedded protection in place, the company was less exposed to supplier insolvency and the associated chargeback risks, and automated refund procedures improved customer satisfaction.
Find out more: The Complete Guide to Insurance Solutions for Travel Businesses
More businesses are trading annual, off-the-shelf insurance policies for cover built into the systems they already operate. A few trends stand out, spanning how cover is priced and distributed:
An annual policy prices risk on a snapshot that is out of date almost the moment it is set. Embedded cover, on the other hand, prices and adjusts on live data. TMU Management has long argued that travel risk, in particular, is too often underwritten on gut feel, last loss and the most persuasive broker.
The fix is infrastructure giving underwriters a shared view of sector losses, live monitoring of the businesses covered and a clear picture of where exposure is building. The wider market is heading the same way, moving from static policies towards something resembling autonomous cover.
This live data fed underwriting is possible thanks to APIs. Not too long ago, an API-delivered policy was relatively rare. In 2026 and beyond, it's becoming more common, particularly for customer-facing insurance. In the B2B setting, however, it's taken a little longer to catch on. In higher-risk sectors like travel and payments, using APIs to connect insurers to company booking and payment systems is allowing them to patch exposure gaps affordably.
AI is taking on the slower parts of underwriting and insurance claims. In underwriting, it can work through large amounts of information quickly, reducing analysis time significantly. It's also changing how claims are handled, with insurers spending more of their budgets on automation projects. None of this automation removes the underwriter from the equation, but it does improve efficiency and helps customers get claims decisions faster.
Investment in embedded insurance is accelerating alongside its adoption. In July 2026, for example, an embedded protection specialist raised $100 million at a $1.9 billion valuation. Investment at this sort of scale is a signal that embedded insurance is increasingly being treated as core infrastructure and that the appetite for solutions extends to the firms building it into travel, payments and other high higher-risk sectors.
If you're interested in learning more about how embedded insurance works, read part one of our series: What is Embedded Insurance and How Does It Work?
At TMU Management, we offer intelligent embedded insurance solutions that protect and strengthen the financial infrastructure of travel companies, payment providers and FX brokers. Designed to integrate neatly into your existing systems, our products support your compliance requirements and reduce your exposure.
As embedded insurance specialists, our approach is driven by expertise and insight, and our solutions are never off the shelf. Instead, we work closely with our clients to design insurance cover that's tailored to their regulatory obligations, operational model and their commercial priorities.
Our main insurance products for travel, payments and FX companies include:
The cover we offer differs from traditional insurers because it's closely tailored to your business's needs and embedded into your operations without interrupting them. This strengthens your financial foundations by reducing risk exposure, giving you the long-term stability you need to support your customers and your business's own growth.
Contact the TMU Management team today to discuss how our embedded risk solutions deliver real-time protection.
If you need insurance that reflects how your business really works, TMU Management is here to help. Our team will assess your challenges, understand your exposures and design a bespoke solution that fits your strategy.
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