Who is a broker's real customer?

When Tesla cut car prices by up to 20 percent in early 2023, the real victims weren’t Tesla customers. Used-car platforms were left in trouble when the Teslas in their stock lost value overnight. Tesla made a decision; the sellers had to comply. In business there are two kinds of company: those that set the product, the price and the quantity, and those who must adapt to them. The first builds the order, the second obeys it. In a healthy relationship power is relatively balanced; in an unhealthy one only one side speaks.

The invisible asymmetry in insurance distribution

This asymmetry has long carried the seeds of an invisible crisis in insurance distribution. Many digital insurance intermediaries depend on a few large carriers for their revenue. When the market is good this creates no problem; companies open budgets for new customers, the intermediary grows. But when the market tightens the equation flips: insurers cut commissions, lower referral budgets, tighten terms. The intermediary, in response, resorts to layoffs. It looks like a cost-cutting operation, but it’s really the asymmetry surfacing.

The unwritten rule is this: if a B2B company’s revenue depends on one or two customers, that company isn’t an independent player but an extension of those customers. It thinks it’s setting its own strategy, when it actually lives inside someone else’s.

This asymmetry isn’t unique to insurance. Any supplier whose revenue rests on a single large customer is comfortable on that customer’s good day and defenseless on the bad one. But in insurance distribution it carries a particular subtlety: the intermediary often misidentifies who its customer is. While thinking of itself as an independent advisor serving the consumer, it actually behaves like an extension of the insurer that sets its revenue.

The way to balance this asymmetry is clear too: diversify the customer base and revenue sources, but more importantly, own the customer relationship and its data. An intermediary whose revenue depends on one company is left holding only a dependency when that company changes strategy. But an intermediary who knows its own customer, their need and their history, stays strong at the table whichever insurer it works with. In short, the issue is not who you work with, but who the relationship belongs to.

AI is accelerating the equation

The AI age is speeding up this equation. A consumer who once typed into a search engine to look at motor insurance, clicked the top comparison site and filled a form now asks an AI assistant directly. The core value the intermediary produced, information and price comparison, is now offered free and personalized at that. In the old economy the intermediary was on the consumer’s path; in the new one that path doesn’t pass through the intermediary.

On the brokerage side I’ve seen this for years. A broker’s real capital is its independence; the ability to work with several companies and search impartially for the best solution for the client. When that independence is lost and the job shrinks to carrying offers to a single company, the broker is no longer an intermediary but a distant sales arm of that company. The difference is invisible from outside, but surfaces painfully in a crisis.

So how is independent value created? In one of three ways: with data no one can easily reach, with expertise that can’t be imitated, or with a genuine relationship of trust built with the customer. None of these is built overnight; but once built, neither an insurer’s budget nor an AI assistant can easily sideline them.

While AI assistants make information and price comparison free, the only defense the intermediary has left is the value a machine can’t easily produce: real advisory on complex, non-standard risk, standing beside the customer at the moment of claim and managing the process on their behalf, the trust built over years. These are things an algorithm can’t imitate overnight. So the intermediary of the future won’t be the one who shows the price fastest; it’ll be the one who can offer judgment, representation and trust beyond price. As information gets cheaper, judgment and trust get more expensive.

The most expensive dependency

A company’s most expensive dependency is the one it has gotten so used to that it no longer notices it. The insurance distributors of the future will be those who can produce value independent of both the insurer and the consumer. That value could be real expertise, a relationship of trust, or an experience no one can easily copy. For the rest, the question is plain: was the party we thought of as our customer really our customer?