An Interview with Jeff Chesky on How Embedded Insurance Is Transforming the Industry

Introduction

The insurance industry is hemorrhaging money through an inefficient distribution model while clinging to practices from the 1950s. In this no-holds-barred interview, Jeff Chesky, a banker turned insurance disruptor, explains why the traditional value chain is on the verge of profound change. He also outlines why platforms that own the customer relationship will ultimately feast on the remains of carriers and brokers who refuse to adapt.

The Last Dinosaur Standing

Yuri Poletto: How do you see the traditional insurance business vertical evolving, and what’s driving this transformation?

Jeff Chesky: Let me be blunt. Insurance is the last dinosaur standing in the business world, desperately screaming for someone to drag it into the 21st century. We are talking about an industry that still considers it revolutionary to offer online quotes. Meanwhile, I can order a pizza, track it in real time, and pay with cryptocurrency, but I still need to call three different agents to insure my life, my car, and my pet. It makes no sense.

The traditional model is already dead. The carriers and brokers spending billions on Super Bowl ads simply haven’t noticed yet. Think about the absurdity. The industry spends between five hundred and eight hundred dollars to acquire customers for products people are legally required to buy. It is the equivalent of Walmart spending five hundred dollars in advertising to sell you a gallon of milk. The economics are beyond broken. When the correction arrives, and it will arrive very soon, the impact will make the retail revolution of the last decade look mild.

Here is the real shift. Platforms and ecosystems that already have strong customer ownership are about to take over the insurance industry. Banks know you are buying a car long before an insurer does. Telcos know you are moving before your agent does. These platforms do not need to spend anything on customer acquisition. They already have the customer, the trust, and the data. Traditional distribution cannot compete with that.

All the money wasted on mass marketing will disappear. Data science is replacing billboards, and algorithms are replacing cold calls. Technology will anticipate customer needs long before any agent can.

“Jeff, your auto policy renews in forty-five days. Here are three better options. And since you just bought a plane ticket to Miami, you may want travel insurance. Click here.”

This is where the world is heading.

The Insurance Aisle: One-Stop Shopping for a Fragmented Nightmare

YP: You have mentioned the concept of an insurance aisle. What does this look like in practice?

JC: The current insurance distribution model is extremely dysfunctional.Imagine needing one grocery store for bread, another for milk, and a third for vegetables. Each one asks you to fill out a separate order form asking for same information for each purchase.  That is insurance today. One agent for auto and home, another for business, a third for health, a fourth for life. They all ask the same questions, run the same checks, and charge the same acquisition costs. It is one of the most inefficient systems ever created, yet somehow everyone accepted it.

An insurance aisle removes all of this chaos. Think of how Home Depot works. The paint section has everything you need, from brushes to primer, and someone there makes sure you do not walk out and buy from Lowe’s. And every other home improvement area has is own aisle in the store. Insurance should follow that model. One place, every product, with a single experience that actually makes sense.

And here is the part that upsets traditional agents. These insurance aisles do not to go find customers. The customers are already inside businesses that have millions of users: banks, credit unions, ecommerce players, loyalty programs, and SaaS platforms. The customer is already logged in, verified, and trusting the brand. The insurance aisle simply appears at the moment of need.

“By the way, you need insurance. Everything you require is right here.”

No billboards. No mascots. No expensive television campaigns. Just efficient distribution at the exact point of relevance. Customer acquisition costs fall from hundreds of dollars to almost zero because someone else already paid to acquire and build the customer relationship.

Humans, AI, and the High-Consideration Purchase Paradox

YP: How do customers navigate this insurance aisle? What role do human advisors play?

JC: Here is something that frustrates Silicon Valley insurtechs more than anything. Consumers still want humans involved in insurance purchases. Not because they need someone to hold their hand, but because insurance is what MIT researchers classify as a “high-consideration purchase”.

If you choose the wrong Netflix subscription, nothing serious happens. If you choose the wrong insurance policy, you may discover your outbuilding is not covered after it burns down. The stakes are completely different.

But consumers want human support on their own terms. They do not want an agent showing up at the kitchen table with brochures and a glossy folder. They want to research online, compare offers calmly, and then message a licensed professional at the moment they need reassurance and confirmation that they have the right coverages at the right price. It is advisory support, not hard selling.

Will my grandchildren need insurance agents? Certainly not. AI will understand their coverage needs more accurately than they ever could. But for the next decade, the winning model blends digital self-service with human expertise delivered by chat, text, phone, or video. The customer never has to get dressed, and the agent never has to leave home. Both sides benefit.

The Data Game: Why Ownership Changes Everything

YP: What are the key requirements for business owners who want to integrate insurance?

JC: Any business leader who does not understand the data opportunity behind insurance should not be running a business. Every insurance quote reveals an extraordinary amount of customer intelligence.

Take auto insurance as an example. Your bank may know about the car you financed last month. When we run a quote, we may discover you actually have three cars in total. Two may be older and nearing replacement. Your teenager may have just obtained a driving license. Your spouse may drive thirty thousand miles a year. Suddenly, there are five or six cross-sell opportunities the bank had no visibility into.

Or consider a homeowners policy. We learn you have a dog. That implies a need for pet insurance, but it also signals regular spending on food, veterinary care, and accessories. We learn you have a pool. That opens opportunities for home equity lending. You have solar panels. That points to green energy financing products. Every insurance application is a detailed map of customer needs.

Here is the critical point. None of this data is accessible unless the business owns the insurance agency and the underlying customer data. Privacy laws prevent the sharing of non-public information with third parties. But a wholly owned insurance agency as a subsidiary is not a third party. It is a part of a single enterprise. That is why building an internal agency is not only about insurance revenue. It is about gaining the most complete, legally accessible picture of a customer’s life and needs.

Businesses that understand this will lead the next decade. The others will watch competitors, who suddenly seem to know everything about thier customer, can ancipate their customers needs and artculate personalized solutions, pull ahead.

The Subscription Economy’s Original Gangster

YP: Beyond commissions, what else motivates brands to build insurance aisles?

JC: Everyone is excited about subscription businesses, as if the concept is brand new. But insurance agents have been living off recurring revenue for two centuries. The model was subscription long before Silicon Valley coined the term.

Insurance is even better than modern subscriptions because the switching costs are enormous. You can cancel Netflix in a few seconds. Changing insurers is a complicated, multi-step process. You may face coverage gaps, different underwriting, unexpected pricing changes. This is why insurance retains eighty-five to ninety percent of customers every year. SaaS founders would love numbers like those.

Then comes the part that most executives overlook: valuation. Insurance books sell for extraordinary multiples. Three to four times annual revenue for a stable book is not unusual. Compare that to the typical business that sells for one or two times revenue at best. Insurance agencies generate steady cash flow with almost no inventory, no physical assets, and no need for capital-intensive infrastructure.

I once had a credit union CEO call me in a panic because regulators were tightening capital requirements. His insurance agency sold for two and a half million dollars within ninety days. The issue disappeared immediately. Try achieving that with a branch network or a loan portfolio. You cannot. Insurance commissions are liquid gold.

Any business not building an insurance agency today is leaving significant value on the table. Not just revenue, but enterprise value that can transform a balance sheet.

Innovation That Will Transform Distribution

JC: Let me describe what is coming. It will make traditional distribution look as outdated as video rental stores.

1. Pre-authorized, pre-priced, pre-purchased insurance

Imagine logging into your bank account and seeing a message that says:

“Your renewal is already priced. You will save three hundred and forty dollars. Click to confirm.”

There are no forms, no questions, and no agent. The institution already has your data. The system has already run the quotes and optimized your coverage. One click completes the purchase.

2. The insurance shopping cart

Insurance is one of the only industries where you cannot buy multiple products in a single transaction. If you want auto, home, life, and pet insurance, you must complete four separate applications and four separate payments. We are launching an ‘all insurance marketplace’ with a single-cart checkout. Customers can add several policies from different carriers and pay once. The system handles the rest.

3. AI-driven product creation

We have data from thirty million households. Our models can identify micro-segments that traditional carriers never even imagined. For example, one point eight million households with twelve specific characteristics will buy a particular coverage at a precise price point. MGAs will soon create hyper-specialized products for each of these groups.

4. The embedded everything future

Today, insurance is embedded in banking. Tomorrow it will appear in many more environments.

Your car’s operating system. Tesla has already begun.

Your smart home. Devices such as Ring will adjust pricing based on neighborhood trends.

Your health wearables. Your Apple Watch will be able to negotiate life insurance pricing in real time based on the workout you completed this morning.

The infrastructure for fully embedded distribution is already being built.

The Brutal Truth About What Comes Next

JC: Here is the reality. Within five to ten years, the traditional insurance agent will disappear. Not evolve. Not transform. Disappear. The carriers spending billions on television campaigns will look as outdated as companies that once spent fortunes advertising in the Yellow Pages. The brokers whose business relies on golf outings and long lunches will find those skills irrelevant. The entire conventional distribution model, with its massive overhead and thousands of offices, will fade.

What will replace it is simple. Every customer-facing platform will become an insurance distributor. Banks, retailers, car dealers, telcos, utilities, ecommerce marketplaces. Anyone with a large customer base will embed insurance, not because they want to, but because competitors will do it first. The recurring commissions will help those competitors lower the prices of their core products. That advantage alone will force everyone else to follow.

The winners will be the platforms that already own deep customer relationships. The losers will be those who cling to outdated processes. And the transition will happen fast enough that many players will not even have time to realize they have been left behind.

The Bottom Line

YP: Any final thoughts for industry players?

JC: Stop protecting the past and start building the future. The insurance industry has fought innovation for decades, and it is about to be overtaken by platforms that simply do not care how insurance used to be sold.

If you are a carrier, form partnerships quickly. If you do not, platforms will build their own MGAs and bypass you completely.

If you are a broker, evolve into a technology-driven advisory business or risk becoming irrelevant.

If you are a platform with customers, build your insurance aisle immediately.

If you are an agent, learn new skills or prepare for a very different career path.

The revolution has already begun. You can lead it, follow it, or be crushed by it. The choice is yours.