Friend or Foe?

Agent and Brokers Commentary: December 2022


While a lot has been written about embedded insurance over the past few years, one question remains largely unaddressed: Will the trend be good for agents and brokers or bad for them?

I'd say the answer is... yes. 

The move toward embedded insurance can be good for those who prepare themselves for the transition but could leave the unprepared stranded. 

I'll explain.

Embedded insurance, which I believe is an unstoppable force, will provide a connection to customers that doesn't begin with the agent. That connection will begin with the jeweler who says, Now that you've bought that engagement ring, do you want to insure it? Or with the car dealer who offers to make a connection to an insurer for the vehicle that someone just bought, with the realtor who makes a suggestion about a way to quickly line up insurance for that new home, and so on.  

The question, then, is: Can agents and brokers earn a role in what happens next? The answer is surely yes, at least in most circumstances, for those who position themselves right. The keys, it seems to me, are convenience and relationships. 

Someone wanting to insure that jewelry or that car is being presented with a highly convenient offer -- basically, just click here, and you're done, because all the relevant information about the jewelry and car and even the applicant is already in the computer system. An agent likely begins with an advantage on the jewelry, because that prospective customer probably has homeowners or renters insurance that can just be modified to incorporate the ring. An agent likely has an advantage on that car insurance, too, if they have an established relationship on car insurance with the customer.  

But how big an advantage? Big enough to overcome complete convenience and a persuasive sales person who perhaps gets a commission for steering the customer to a particular insurer?  

To maintain the advantage of incumbency, agents and brokers will need to make themselves absolutely as convenient as possible. That will mean navigating the world of application programming interfaces (APIs), so the jewelry store or car dealer can instantly share all the details that are needed for a policy, so the agent can offer any necessary counsel and so the agent can then connect to insurers and present the customer with a nearly instant quote. 

Agents and brokers will also need to foster all sorts of relationships to make sure they are embedded, if you will, into the process. That issue is as big as all outdoors, so it will have to be approached strategically, but agents and brokers will want to connect with as many businesses as possible that sell jewelry, cars and anything else that a customer might want to buy insurance for as part of the purchase. They will also want to deepen relationships with clients, so the agent is top of mind when someone suggests insurance. Among other things, that will mean finding reasons to communicate with clients beyond today's emails or letters about annual renewals -- reasons that the clients will welcome, rather than find intrusive. 

There will be a lot more beyond those initial thoughts about convenience and relationships. The move toward embedded insurance is a profound change that will take years to sort out. But there's no time like the present to start preparing.



P.S. If you're interested in reading more about the embedded insurance trend, here are some of the best recent articles we've published on the topic: "Embedded Insurance: The New Hot Topic", "The Recipe for Embedded Insurance", "Embedded Insurance -- Both Old and New", and "The Big Aha From InsureTech Connect."

Here are the six articles I'd like to highlight this month for agents and brokers:


Digital games activate our brains’ reward pathways. Agents can use them to help customers learn about insurance and make each lesson stick.


The legacy of Insurtech 1.0 may be more enduring than the actual companies. They forced incumbents to recognize their intransigence, producing a new focus on customer experience.


Insurtech 2.0 recognizes the innovators who came before but takes a more nuanced and collaborative approach, recognizing the structural issues inherent in insurance.


Given how quickly the landscape is evolving, we will likely have a very different channel environment in five years than the one we have today.


A few trends stand out, from the impact of the 2022 election to the continuing roles of inflation and COVID-19, and even green energy’s impact. 


50% of small business owners trust their carriers more than they did pre-pandemic. That number jumps to 80% when the business owner has filed a claim.

Paul Carroll

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Paul Carroll

Paul Carroll is the editor-in-chief of Insurance Thought Leadership.

He is also co-author of A Brief History of a Perfect Future: Inventing the Future We Can Proudly Leave Our Kids by 2050 and Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years and the author of a best-seller on IBM, published in 1993.

Carroll spent 17 years at the Wall Street Journal as an editor and reporter; he was nominated twice for the Pulitzer Prize. He later was a finalist for a National Magazine Award.


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