Manufacturer-branded car insurance and fronting carriers
Some car manufacturers have launched their own insurance products, using vehicle data to price cover for their customers. Because a manufacturer is not usually a licensed insurer, these products are often issued through a fronting carrier.
In a fronting arrangement, a licensed insurer issues the policies and then cedes most of the risk to another party, such as a captive or reinsurer. This lets new entrants offer insurance quickly while relying on the fronting company's licenses and infrastructure.
Fronting has grown alongside insurtech and embedded insurance. It brings opportunities for reinsurers, but also requires careful oversight of the program partner.