Global reinsurers Munich Re and Swiss Re have backed a new “Double-Indemnity” structure from Instnt, an AI-led identity fraud insurance provider, and MarkIII, Inc. (MKIII), an embedded lending enablement platform, as the two companies introduce a strategic partnership aimed at reshaping the $18 trillion US consumer lending market.
Together, Instnt and MKIII have introduced a “Double-Indemnity” structure that integrates fraud loss insurance directly into a credit model warranty, creating what they describe as the fintech sector’s first fully indemnified lending solution. The structure is designed to remove the longstanding tension between portfolio growth and risk management for lenders.
The collaboration establishes what the companies call a “Zero Liability” growth engine, enabling credit unions and other lenders to transfer their two most significant risks, credit default and identity fraud, away from their balance sheets.
Within the Double-Indemnity framework, MKIII provides insurance coverage for credit risk tied to a borrower’s capacity to repay, while Instnt covers identity fraud loss risk associated with a borrower’s intent to deceive. This includes protection against synthetic fraud, third-party fraud, and first-party fraud.
By embedding insurance protection against both economic defaults and fraud losses into each loan, the solution allows lenders to strengthen Net Interest Margin and Return on Equity. Financial institutions can also redeploy traditional bad debt reserves as working capital to support additional lending and revenue-generating activities.
The partnership relies on advanced artificial intelligence to streamline approvals, particularly for thin-file and digital-first applicants who are frequently declined by conventional underwriting systems. Instnt’s identity fraud insurance policies are insured by AM Best A-rated Accredited and reinsured by Munich Re and Swiss Re. MKIII’s Loan Decision Model is supported by Munich Re’s aiSure™ performance guarantee, while fraud loss claims are processed digitally by Sedgwick with a 30-day denial-free guarantee.
“Lenders have historically been forced to choose between growth and safety. We are eliminating that trade-off enabling safe, scalable growth,” commented Sunil Madhu, Founder and CEO of Instnt. “We are delivering a ‘Double Indemnity’ model where the lender captures the yield while we absorb the volatility. This is the future of scalable underwriting”.
The companies say the integrated offering will be especially relevant for mid-market banks and credit unions seeking to compete more effectively with large fintech lenders. By removing exposure to identity fraud losses, institutions can broaden their “buy box” to reach younger and underserved borrowers while pursuing higher loan volume targets in 2026 without elevating their overall risk profile.
“Our goal at MKIII is to help lending institutions say ‘yes’ when their competitors say ‘no’,” added Bryan Adler, Co-Founder and CEO of MKIII. “Integrating Instnt’s fraud indemnity into our program is a pure-play growth engine for the banking sector since Instnt covers the only gap in our coverage”.
“Our goal at MKIII is to help lending institutions say yes to existing customers and compete with the big fintechs without taking on fintech-level risk. We cover the credit risk, Instnt covers the fraud risk, the lender keeps the yield – that growth vs. safety trade-off disappears. This means more approvals for members who deserve access to credit, without adding risk to the balance sheet.”
“Munich Re is providing the institutional-grade confidence necessary for lenders to scale their portfolios while maintaining the highest standards of financial resilience,” said Ted Pine, AI Risk Underwriting, Munich Re. “The integration of Instnt’s fraud loss insurance and MKIII’s loan decisioning represents a significant step forward in making AI-driven lending truly bankable.”
The combined Instnt and MKIII solution is now available to qualified credit unions, banks, and fintech lenders. The indemnity layer is embedded within a package that includes MKIII’s APIs and Instnt’s AI agent, delivered through a low-code, no-code integration model designed to support rapid deployment.
