Direct Commercial Carriers Falling Back on Independent Agents

If you have been following the small commercial insurance market and commercial insurance software, you can agree that current insurtech trends are mimicking personal line trends from the early 2000s. Therefore, it is not a matter of “if” but “when” rating comparison engines, automated quoting, and online binding will be the norm. 

A Shift Begins

As early as 2013, innovative carriers were dipping their toes into direct commercial online. Then personal lines, which comprise a large segment of the market shifted to buying direct online as well. Insurance experts such as Deloitte announced that 14 – 29 percent of small business insurance buyers would prefer to buy online if available1. The smaller the company, the more likely it seemed they were to buy directly online. In fact, in Deloitte’s survey, 90% of those surveyed said that they would buy GL direct from the carrier website or a comparison rating engine and 63% of those surveyed said that they would buy workers’ compensation directly from a carrier website or comparison rating engine1. 

By 2016, the industry began forecasting the death of the commercial insurance agent with headlines like “7 Reasons the Insurance Agent is a Dead Profession Walking2” and “The End of An Era for the Local Insurance Agent3”. It seemed the death of independent commercial insurance agents was only a matter of time. What tech and business analysts didn’t recognize is that many commercial insurance products require unique knowledge and skills to properly assess risk and obtain the proper rate. “Insurance policies are too complex” you say? I’m not so sure. 

A Shift Becomes Necessary to Meet Current Standards

Risks are now increasing due to COVID. We are witnessing political instability, the acceleration of increased regulation, new environmental hazards, and “bad actor” technologies. Even small businesses are dealing with issues formerly isolated to large enterprises. Carriers know these risks and build products around them. However, most small business owners aren’t risk experts. They build their businesses around a focused, specialized market and skill.  

Additionally, trying to answer all the questions on a commercial insurance policy can make a small business owner’s head spin. So, what do they do? They engage the direct carrier’s support desk to ask questions, defeating the purpose of a direct online buying mode. High touch requires more people or advanced AI technology, which drives up costs. High costs mean higher rates, and higher rates make the direct product look unappetizing in a comparative rating engine. This ultimately results in production falling short of expectations and investors pushing back asking, “Didn’t you say direct digital was a disruptive, high growth market? Where’s the growth performance?”

Evolving with the Industry

Appluate, classified as one of the insurance innovators, specialize in automating submissions through digital integration between networked insurance agents and carriers. Even more, Appulate identifies emerging insurance technology solutions and trends before many others can. In early 2021, direct carriers began to include independent agents and MGAs in production, making it recognizable that most small commercial customers require help navigating insurance products. Streamlined insurtech solutions that connect with both the independent agent and MGA channels enhances growth while offering a high-touch option to help customers properly identify and manage risk and premium cost. This trend will continue to grow over the next five years as distribution expansion technologies (i.e. Appulate) connect agents to carriers.

What About Artificial Intelligence? Digital Agents?

Artificial intelligence is only as good as the data scientists building the algorithms. Finding an insurance risk expert who also knows data science is like finding a Bugatti La Voiture Noire. They are rare, hard to find and very expensive. Can that change? Sure. But for the foreseeable future independent agents and MGAs are taking a bigger role in production.

This is where Appulate shines. Appulate marries best-in-class submission and quoting automation with the single largest network of independent agents (more than 300K agents) to produce over $1B in annual premium for carrier partners. To learn more about Appulate visit our website at and explore what we have to offer Carriers with our latest product CarrierConnect.

  1. “Voice of the small-business insurance consumer Are buyers ready to take the direct sales route?”,, Deloitte, 2013.
  2. “7 reasons the insurance agent is a dead profession walking, according to startups”,, Insurance Business Magazine, 2016.
  3. “Agents of the Future: Evolution of Property and Casualty Insurance Distribution”,, McKinsey & Company, 2013.