The function of insurance is simple: helping people and companies manage uncertainty and risks. However, when we look at growth over the past few years, there is a clear challenge. This article introduces a strategic AI Insurance Growth Framework to help executives move past traditional limitations and unlock sustainable revenue lines.
According to a McKinsey analysis, over a five-year period, the software industry achieved approximately 5.94x growth in total revenue, the automotive industry 3.05x, healthcare 2.63x, pharmaceuticals 1.65x, while insurance reached only 1.24x. The insurance industry has a growth problem. The verdict is clear: the insurance industry has a fundamental stagnation issue that requires a dedicated Insurance Growth Framework.
The question for insurance leaders is not how to make the existing model cheaper. The industry has been solving that challenge for years. The real question is how insurance can create a new engine for growth. Artificial intelligence will certainly change the industry. The biggest mistake would be to look at AI only as a tool for process automation, cost reduction, or replacement of existing activities.
The Hidden Risks of AI Efficiency
One of the main ideas is that AI can enable faster and more accurate claims handling. This certainly creates efficiency, but the key question is where that value is created. Is it created through lower operational costs, fewer employees, or reduced claim payouts? Only through these types of improvements can the ROI of such an initiative be justified. However, if the value of AI is measured only through reducing claim payouts, there is a risk that customers will start feeling that technology is working against them rather than for them. This directly affects trust and long-term loyalty, creating a risk of customer churn. All these risks and calculations need to be included in a detailed ROI analysis.
Another idea is that AI will enable better pricing models. This can challenge the concept of growth and create a situation where the industry enters a race where everyone is trying to become cheaper. If a significant number of customers leave every year by switching insurance providers, the question is: how many new, high-quality customers can we attract and retain?
5P Insurance Growth Framework
In my view, the biggest value of AI should not be found in replacing existing models. AI should enable a completely different growth model. A model where insurers do not build relationships only with individual customers but also use the trust networks that existing partners already have.
The modern solution lies within the 5P Insurance Growth Framework. The five pillars of future growth are:
Partners, Platform, Prevention, Personalization, and Profit.
Partners: Implementing the Insurance Growth Framework Through Trust
One of the biggest strategic mistakes insurance companies can make is trying to replace partners with direct digital channels. The problem is not that direct channels have no value. The problem starts when a company sees a partner only as a distribution cost, rather than as the owner of the relationship and trust.
The Flawed Logic of Direct Disintermediation
The calculation for insurance companies is simple: if I take 10% of the customers from a partner through direct contracting, I also earn the partner’s margin. However, ROI analysis often calculates only the additional margin, not the potential loss of the ecosystem.
AI will push many insurance companies exactly in this direction. AI and consultants say that if we have data and if we have an application, then we can go directly to the customer. But the biggest value of a partner is not only selling one insurance policy. The biggest value of a partner is the relationship that the partner has with the customer. In the worst-case scenario, an insurance company can gain 10% of the direct portfolio, but lose 100% of the trust of a partner who controls the rest of the relationship.
Unlocking the Hidden Signals of Trust
Let’s imagine a simple example. A customer travels regularly and buys travel insurance every year through a travel agency they trust. The insurer sees only one piece of information: another travel insurance policy has been sold. But it does not see the most important part: this customer potentially trusts this partner.
The insurer does not know why the customer chose exactly that partner. It does not know whether it is a personal relationship, years of trust, or a recommendation. The insurer does not know that the same customer may need home insurance, a health package, additional family protection, vehicle insurance, etc. This is where AI should change the approach.
Transforming Partners into Intelligent Ecosystems
AI should not be used to bypass the partner. It should be used to make the partner much more valuable. AI can help partners recognize customer needs.
Example 1 – A travel agency sees a family that travels every year. AI recognizes the pattern: they have children, they travel frequently, and they use international protection. The partner receives a recommendation to offer them a personalized annual family health package.
Example 2 – A bank sees that a customer has bought a new apartment. Today, insurance often appears only as part of the mortgage process. But what happens if the customer owns multiple properties or buys a property with cash without a loan? So many buildings are being constructed, yet insurance companies often have no way to turn that signal into a timely and relevant offer. AI can recognize new life events and new opportunities.
The offer should still go through the partner who already has a relationship with the customer. The partner can offer a wider package with the goal of increasing the value of the existing relationship between the partner and the customer.
The biggest mistake is thinking that direct channels will give insurance companies more control. The better question is: how can every existing relationship through a partner create even more value? It is better to have home insurance through a partner with a partner margin than to have a perfect digital channel and zero new policies.
A partner is not an obstacle. A partner is the shortest path to trust.
Platform: From a Closed System to an Open Insurance Growth Framework
Most large insurance companies have the same problem. Core systems have been built over decades. Changing everything at once requires years and huge investments. But the market does not wait. That is why the future is not only about completely replacing existing systems. The future is about creating a layer that enables connections.
I see the following connections:
- API interfaces: The digital bridges to the outside world.
- MGA models: Partnering with agile managing agents.
- Modular Products: Breaking down coverage into pieces.
- Embedded Insurance: Selling protection at the exact point of sale.
- Cross-Border Models: Moving past geographical limits.
Insurance companies can open new channels without waiting for a complete transformation.
Reaching the Uninsured Market
New markets are not only about existing customers of competitors. The biggest opportunity is not only taking 20% of another insurance company’s customers. The biggest opportunity is reaching people who are not adequately insured today. Many people around the world have no insurance at all or do not actively think about insurance.
Cross-border insurance becomes especially interesting because traditional products often follow country borders, while modern customers no longer live within those boundaries. A person today can live in one country, work for a company from another country, and spend several months each year in a third country. Traditional models were not designed for this way of life. Why would these customers buy traditional annual coverage? The next generation of products must offer flexible international health insurance, protection that is active only during a specific period, and modular protection based on the customer’s real lifestyle.
Micro-insurance products can open completely new segments. A customer may not want an annual policy, but they may want laptop protection while working from another country, bicycle insurance while travelling, protection for equipment used during work, income protection during temporary inability to work, or protection for pets while they are away.
Modular health insurance can also become a major trend. In many countries, there is a gap between complete health protection, which is often expensive, and having no private health protection at all. There is room for modular products, modular insurance solutions, telemedicine, second opinions, specialist examinations, diagnostics, international medical consultations, and more.
The goal is not to replace existing systems. The goal is to open access to millions of people who are not currently users of private insurance.
Prevention: From Paying Claims to Managing Risks
Traditional insurance starts when the problem has already happened. But the future is about insurers helping to prevent the problem from happening.
It is important to understand that prevention is not, for example, only a humidity sensor or a water leak sensor. A sensor can detect that a valve has already broken. Insurance companies often present this idea by saying that sensors will help them pay much less for damage compared to the situation when a pipe or valve completely fails. There is some truth in this, but the question is what percentage of people will not actually notice a small leak in their home. And when they notice it, how many of them would contact the insurer or solve the problem themselves?
Real prevention starts earlier.
Moving Upstream with AI and Local Networks
Consider this practical scenario. An insurer knows that there are many properties with old installations. AI identifies an increased risk of water leaks in a specific area. Instead of waiting for a claim, the customer receives a recommendation. The insurer connects the customer with a trusted service provider who can inspect the installations. The customer feels that the insurer cares about them. The customer gets the feeling that the insurer is not there only when a claim needs to be paid, but that it actively helps prevent the damage from happening. If the service provider replaces a critical component, the potential damage is removed before it occurs.
Additionally, the customer could be informed that their policy will be reduced by 2–3%. When this is combined across several policies in the same area, it can be enough to cover the cost of the service visit. The customer then feels that they are receiving a free home installation check.
Turning Prevention into a New Revenue Stream
There is an even bigger opportunity here. Prevention can become a new revenue channel. If an insurer builds a network of plumbers, repair services, energy specialists, healthcare partners, and others, it is no longer only a company that pays for consequences. It becomes a company that helps manage risks.
Globally, even a small fee from millions of preventive interventions every month could represent a completely new source of revenue.
Personalization: Connecting Life Events to the Insurance Growth Framework
Today, insurance often thinks through products. They focus on car insurance, home insurance, travel insurance, and health insurance. But people do not think through products. They simply live their lives. People think through life events such as buying a home, having a child, changing jobs, travelling, or moving to a new place.
AI should enable insurers to understand the moment when protection becomes relevant. The goal is to sell more policies, but not to overload customers. Personalization means that a customer receives one relevant offer at the right moment. The target is simply to become more useful.
The biggest value is not that a customer buys one policy. The biggest value is when one relationship grows into a higher level of protection.
Personalization is not just sending an automated email with the customer’s first name in the subject line. Personalization is understanding when a customer enters a new life risk.
Profit: Growth that everyone wants to support
The ecosystem will not grow if value exists only for the insurance company. Your partners must have a strong, logical reason to participate. Your customers must receive a significantly better service. Only then can the insurer generate sustainable, long-term profit through a modern Insurance Growth Framework.
Real, modern growth functions as a continuous flywheel:
More partners → More quality customers → More trust → Better data → Better decisions → Better profitability → Higher value for partners → More partners.
Monetizing Trust Through Premium Service Models
Conclusion
AI will not win because one company has the best algorithm. AI will win with companies that understand how to scale trust through technology.
The future of insurance is not a digital channel instead of partners. The future is digital intelligence that enables every partner to become ten times more valuable.
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