In a recent article for Insurance Thought Leadership, Rick Huckstep discusses the evolution of the insurance supply chain from the typical linear model. In the past, insurance distribution starts with brokers, ARs and MGAs at the front end. Carriers underwrite risk and decide whether to pay a claim. And the buck stops with the reinsurers. Front to back, risk and premium move from one intermediary to another, each one taking its share. It’s a model that insurtech’s are chipping away at as customer expectations have changed.
In new distribution models there will be fewer handoffs, less friction and less premium erosion. More like the Amazon model where the customer is at the center of the ecosystem. Models like the one we have at Sherpa is to charge a membership fee in return for meeting all insurance needs, ultimately removing commissions across the value chain from the equation.
You can read about other models in the full article here