Delivering Insurance Solutions within Europe via Freedom of Service

Insurtechs have been continuously rising in recent years, transforming insurance products by making them more accessible, more customer-centric and more user-friendly. The insurtech landscape has been evolving rapidly, driven by innovation and technology, and therefore opening new possibilities within the insurance landscape. Those that have been able to successfully navigate the regulatory hurdles are slowly emerging as resilient challengers to traditional players, optimizing the offering and delivery of insurance products to their clients, especially in the B2B and B2B2X space.


Innovative solutions can be especially found within the B2B2X space. B2B2X models, consist of a regulated insurance company or insurtech (first B), and either an insurance intermediary, or a business that wants to add insurance to its value chain (second B). The end-customer (X) can be either a an individual or a business itself. The end customer always deals with the intermediary and never with the regulated insurer. But even though the product is seamlessly integrated into the intermediary or business, the latter does not need to obtain a license or carry out any of the other regulatory activities. A licensed partner like ELEMENT takes over this part in the background.

B2B2X model

As businesses or intermediaries seek to continuously expand their product offerings and grow their customers base to new geographies, new business models play a more important role in navigating the regulatory landscape in different countries.

The combination of innovative insurance solutions and the regulatory set up within the European Union serves as a perfect match to facilitate this expansion. Thanks to the freedom to provide services and the free movement of people and goods, businesses have access to 30 countries that are part of the EEA and 447 million people. This makes the EU the ideal landscape for multi-market insurance solutions, as it poses a decisive advantage versus individual countries or non-harmonized markets like the US, where different laws, separate approval processes and regulations may apply depending on the state.

It therefore becomes especially attractive for businesses and insurance intermediaries to expand in countries across the EU, while minimizing the lengthy regulatory process that comes with it. Especially those regulated insurtechs that specialize in API integration and white label solutions have the potential to fill this need, leveraging the EU regulation around Freedom of Service (FOS).


But what is Freedom of Service exactly? How does it work?

According to the European Parliament, the freedom to provide services and the freedom of establishment guarantee the mobility of businesses and people within the EU. Those businesses that are authorized to carry out their business activities in any European Economic Area (EEA) country are in principle permitted to carry out their business in other member states too.

The freedom to provide services and the freedom of establishment are closely interrelated. The right of establishment entitles persons and companies to set up agencies, branches or subsidiaries in other Member States under the conditions laid down for its own nationals by the law of the country where such establishment is affected.

The freedom to provide services facilitates businesses to offer services in another Member State, without having to be established in that market via a branch. In the context of insurance, this means that via freedom to provide services, insurance companies and intermediaries can distribute insurance products across the EEA from one member state without the need of establishing multiple branches, by notifying their home-country regulator.

Freedom of Service in the EEA

Attribution: "Map of the European Union" by NuclearVacuum is licensed under CC BY-SA 3.0. Available at


In order to benefit from the simplicity of freedom of service, certain processes need to be in place to ensure that key decisions across the insurance value chain are taken in the country where the regulated insurer is based.

The process of passporting the relevant license to multiple EU countries then takes only a few short weeks and is a major advantage over the lengthy process of getting approval for freedom of establishment.


How can Freedom of Service simplify internationalization?

Traditionally, when a business wants to roll-out in ten markets at once, they need to work with ten regulated insurers or business units from the same insurer, ten teams and countless processes. The roll-out would imply a multi-fold of effort and carries the risk of creating lengthy, parallel, or even duplicate processes. In some cases, that given regulated insurer or business unit might not have appetite for certain countries, which can result in a need to negotiate with other insurers altogether, not to forget the language differences and local specificities, which can pose additional hurdles for international partners.

To overcome these challenges, a pan-European insurer can cover all EU markets via FoS, and ensure smooth scaling across multiple geographies simultaneously, via one single process, and with one international dedicated onboarding team for faster roll-out.

This is the case of ELEMENT, as a regulated pan-European insurance company, who is championing the freedom of service opportunities supporting its partners. As the leader in the seamless delivery of insurance across the EU, and already active in several countries with multiple lines of business, our partners can work directly with one primary insurer for all 27 EU markets.

Thanks to an API set-up, the key decisions across the insurance value chain, including underwriting and claims approval can happen in real time where the regulated entity is located, Germany in our case. This ensures compliance with the FOS regulation and does not interfere with the intermediaries’ business processes.

Our flexible set-up also makes sure that the claim handling can be managed by the insurance intermediary or the regulated insurance company, depending on capabilities. With only one process to scale across multiple geographies simultaneously, overcoming different languages and local regulation, it will be possible to passport the license to multiple EU countries in a matter of weeks (something that is already possible in 10+ countries) instead of dealing with lengthy, broken, slow processes with traditional insurers.


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