Today's Viewpoint: A MarshBerry Publication


Structural changes are occurring in the personal lines space with technology companies taking new views on the insurance sector. What can traditional personal lines insurance agencies do to stay competitive? Here are five ideas.

Tech giants playing in the insurance space

Insurtech, or the intersection of insurance and technology, has long promised to improve the efficiency of the insurance industry. While insurtech covers a broad area and continues to influence how personal insurance products are being distributed, the entry of notable, technology-focused companies into the space promises to disrupt the landscape even further.

Here are a few examples of name-brand technology firms who have recently entered the personal lines insurance space, focused on changing the distribution of insurance policies.

  • Amazon: The distribution giant plans to enter the U.K. home insurance market by utilizing its transparent, consumer powered platform to make comparing and buying policies easier and more accessible. Amazon will offer polices through three current U.K. insurance companies – Ageas UK, Co-op and LV General Insurance, with the goal to add more.1
  • Apple: Apple has long targeted wearable technology and continues to be a major player in the health care space (i.e., Apple devices in hospitals and doctor’s offices). Apple is beginning to look at possible health insurance opportunities by leveraging data from Apple Watches to launch an insurance platform in 2024.2
  • Tesla: The car manufacturing and tech-enabled giant, has started writing auto policies through its wholly owned subsidiary – Tesla Property and Casualty.3 Embedding the sale of insurance coverage with the purchase of the vehicle, Tesla is using data collected from the cars to improve underwriting outcomes. The company will be able to assess risk in greater detail, offering discounts for safe driving and utilize the growing usage-based pricing models.

Impact of EVs on the insurance industry

While large technology companies testing the waters of insurance distribution is a major development for the future of Main Street personal lines, it’s not the only transformation the industry is facing.

The rapid adoption of electric vehicle (EV) technology, due to tax incentives for consumers and global efforts to reach net-zero emissions by 2050, will have an impact on the personal lines industry.

California, following Europe’s lead, recently passed a bill effectively killing the combustion engine by 2035. As many as 17 additional states are considering similar laws.4 However, as the sales of EVs increases, so does the need for servicing, repairs and parts for this advanced technology, which costs more than non-EV vehicles.5

The impact of increased sales of EVs creates additional challenges for insurers who need to understand the complexities of this technology from a risk, underwriting and cost perspective. Furthermore, for electric cars, many enabled with self-driving technology, the risk transfer may start to move from the driver to the manufacturer and the policy form may move from personal lines to commercial.   

How personal lines agencies can remain competitive

With tech giants offering direct-to-consumer and embedded point-of-sale insurance options, and with some risk classes shifting from personal lines to commercial lines, there is no doubt the traditional market for personal lines insurance policies is changing. Part of being competitive and growing organically means staying current with technology. The insurtech space has multiple options available to assist brokers and agents in selling policies and managing them. Understanding the benefits of these resources will help your firm remain competitive.

As your firm explores ways to embrace change and grow, here are five ideas for staying competitive in a technology-driven world.

  1. Stay informed. Keeping on top of this ever-evolving technological landscape is always a challenge. But being well educated on changes in the insurance world and on technology gives you an edge in your service to clients.
  2. Be balanced. Despite the flashiness of technology, a personalized client experience still has a lot of value. Continue to focus on personalized experience and quality service that your agency brings. Having an agent is a value and can complement a technology-based strategy.
  3. Adopt automation. Using advanced technologies to help automate policy underwriting and risk assessment can help make you more accurate, efficient, profitable and client focused.
  4. Diversify your product offering. While many personal lines agencies offer home and auto, consider ancillary product offerings such as individual life or Medicare policies to increase the consumers’ share of wallet.
  5. Don’t go at it alone. While remaining independent, the resources of a larger group can benefit your firm and in return your customers. Joining a peer network or exploring the benefits of a P&C aggregator allows firms access to stay current with the latest, emerging technologies.

If you have questions about Today’s ViewPoint, or would like to learn more about distribution changes in personal lines and how to adapt, email or call Brian Refici, Vice President, at 440.769.0321.

Investment banking services offered through MarshBerry Capital, LLC, Member FINRA and SIPC, and an affiliate of Marsh, Berry & Company, LLC, 28601 Chagrin Blvd, Suite 400, Woodmere, OH 44122 (440) 354-3230


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