Instnt, the pioneer in AI-led Identity Fraud Insurance, and MarkIII, Inc. (MKIII), a leading embedded lending enablement platform, today announced a strategic partnership that introduces a “Double-Indemnity” model to the $18 trillion US consumer lending industry. By integrating Instnt’s fraud loss insurance into MKIII’s credit model warranty, the companies have created the fintech industry’s first fully-indemnified lending solution, allowing lenders to eliminate the trade-off between growth and safety.
A New Standard for the Lending Industry
This collaboration creates a “Zero Liability” growth engine that allows Credit Unions and Lenders to shift their two most critical lending risks – credit default and identity fraud – entirely off their balance sheets and their bottom line.
Under this new “Double-Indemnity” framework:
- MKIII insures the loan against Credit Risk (the borrower’s ability to pay).
- Instnt insures the loan against Identity Fraud Loss Risk (the borrower’s intent to deceive the lender).
By protecting every loan against both economic defaults and identity fraud losses (including synthetic, third-party and first-party fraud) with these embedded insurance programs, lenders can significantly improve their Net Interest Margin (NIM) and their Return on Equity (ROE). This innovation enables financial institutions to turn their traditional bad debt reserves into active working capital for further lending and fee generating activities.
AI-Driven Innovation Backed by Global Giants
The partnership leverages advanced AI to automate approvals for “thin-file” and digital-first applicants who are often rejected by legacy risk models. This technology is backed by the world’s most formidable insurance balance sheets:
- Top-Tier Backing: Instnt’s Identity Fraud Insurance policies are insured by AMBest A rated Accredited, and reinsured by Munich Re and Swiss Re.
- Performance Guarantees: MKIII’s Loan Decision Model (LDM) is backed by Munich Re’s aiSure™ performance guarantee.
- Efficient Claims: Fraud Loss claims are digital with a 30-day denial-free guarantee, processed by Sedgwick.
“Lenders have historically been forced to choose between growth and safety. We are eliminating that trade-off enabling safe, scalable growth,” said 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”.
Expanding the “Buy Box” for 2026
The integrated solution is designed to help mid-market banks and credit unions compete with major fintechs by safely expanding their “buy box” to include younger and underserved demographics. By removing identity fraud loss exposure, lenders can aggressively expand their loan volume targets in 2026 without increasing their risk profile.
“Our goal at MKIII is to help lending institutions say ‘yes’ when their competitors say ‘no’,” said 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.”
Availability
The integrated Instnt and MKIII solution is available immediately to qualified credit unions, banks, and fintech lenders. The indemnity layer is baked into the solution which includes MKIII APIs and Instnt’s AI agent, in a low-code/no-code combination for quick and easy integration and deployment.
