When everyone is an insurer, what's left for the insurer

For years the question we kept asking was whether insurers would go digital fast enough. A recent Boston Consulting Group study asks something more uncomfortable. When everyone becomes an insurer, what’s left for the insurer?

Amazon, Apple, carmakers and large platforms no longer serve a single need but a whole cluster of them. Because protection so often follows right behind the purchase of a product or a service, insurance gets embedded into that cluster. BCG’s estimate is bold: providers of non-insurance products and services could capture up to a quarter of new P&C business through embedded insurance. If that plays out, the hardest hit will be mid-sized insurers without a strong customer base of their own.

The new equation: from selling to enabling

BCG frames the shift with an acronym: from B2B2C to B4B2C. One letter of difference, but the meaning is large. In today’s partnerships the insurer still sits at the center and sells its product through another company’s channel. In the new model the insurer steps back from the center. It doesn’t sell its product; it lets another company offer insurance to its own customers. The insurer becomes the infrastructure that turns non-insurance companies into insurers.

This means giving up customer ownership. For a long-established insurer that is hard even to say out loud, because the industry spent decades seeing itself as “the one party that meets the need for protection.” Yet in the new equation the partner holds the point of contact with the customer. What the insurer gains isn’t individual customers, it’s access to a company’s whole customer base, its sales journey and its data. What it gives up is the privilege of standing in between.

Why a company would want insurance even at a loss

The most overlooked piece of this picture is what BCG calls second-order effects. A carmaker, a mobility platform or a telecom doesn’t want insurance only as a revenue line. It wants insurance as a lever that grows its core business.

For a carmaker, embedded insurance feeds after-sales revenue and keeps the customer inside the brand’s ecosystem. For a mobility platform, cutting the risk of a driver being stranded lifts demand for the service directly. For a telecom, insurance is a way to retain customers, to lower churn. In Turkey too, insurance can be a stickiness tool: for an e-commerce platform it lifts cart conversion, for an operator it keeps the subscriber on board. The value sits less in the product itself than in the bond it adds to the core business.

Even when these companies don’t earn from insurance, they earn from the value insurance adds to their real business. And a clear conclusion follows. Thanks to those second-order effects, these players can afford to run the insurance operation at a below-average margin, even at a loss when needed. This is exactly where the traditional insurer can never compete on price. When a player that uses insurance as a lever for its core business sits at the same pricing table as a player whose core business is insurance, the second one loses before it starts. A traditional insurer who doesn’t see this asymmetry walks into the wrong fight.

The courage it takes to become an enabler

BCG lists ten principles for preparing for this new role. Rather than run through them one by one, we can gather them under a few headings that face the same direction.

The first is mindset. The insurer has to accept that its future success will come only from making other companies better insurance providers than itself. That means putting the relationship, not the product, at the center.

The second is the revenue model. Premium stops being the single headline metric; in a platform business the real income flows through commission, through fees. The insurer starts earning less from the size of its premium pool and more from the added value it creates on its platform.

The third is breaking up the value chain. Most insurers run in national silos, yet a multi-country partner needs a multi-country structure. BCG’s suggestion is to disaggregate the value chain the way an MGA does: conceptual work like product development and pricing on a central platform, risk-carrying and local operations in separate units. That way the insurer can offer both scale and localization.

The fourth is the one most easily skipped: understand the partner’s business, not its product. The insurer shouldn’t open with an insurance product; it should first understand the partner’s business model and its real problem. Grab’s solution came from exactly there. Facing the risk of losing its drivers, the Singapore-based platform worked with ZA Tech to build a product that protects a driver against lost income during illness or an accident, with the premium deducted automatically from earnings. The aim wasn’t to sell a policy; it was to keep the driver on the platform. Insurance worked because it solved the partner’s problem.

Behind these principles sit two more practical conditions. One is the cost base. Partners run digital-first and don’t want to pay the bill for old systems, physical distribution networks and manual processes; becoming an enabler calls for a cost structure that doesn’t carry the weight of the past. The other is speed. Opportunities show up without warning and decisions get made within days. An insurer whose internal approvals take weeks, who stalls in premium haggling, can’t keep pace with its partner and loses the relationship. Agility here isn’t a preference, it’s a threshold.

The price: enabler, or invisible capacity

So far the picture looks appealing. But being an enabler has a price, and that price doesn’t get discussed enough.

Letting go of customer ownership, done right, is a position. Done wrong, it’s a surrender. Because if you hand over the interface, the data and the product intelligence along with the customer, all that’s left is your balance sheet. You become pure capacity, the party that only carries the risk. At that point you become a commodity, and a commodity’s fate is set: the partner swaps you out whenever it likes.

The Grab example needs reading both ways. That same Grab works with more than 20 insurers and deliberately switches off the old systems of long-established carriers. It keeps the experience and the value proposition to itself and takes the risk from outside. This picture is both an opportunity and a warning for an insurer that wants to be an enabler. More than a hundred million policies sold in two years is an impressive number, but volume isn’t profit. The field reality of embedded insurance holds cancellation rates, low lead quality and, more often than not, a simple referral in place of real integration. Getting through a door isn’t the same as passing value through it.

Breaking up the value chain is also a double-edged blade. BCG presents it as a strength: keep the conceptual work at the center, push risk and local operations out. But the same logic runs in reverse. If what you keep at the center is only risk-carrying, then in the chain you broke up you become the most easily replaceable link. Disaggregating your own value chain, you can make yourself dispensable without noticing.

So the real question isn’t “should we get into embedded.” The real question is: what do we hold on to when we do? BCG says this in its own words, actually. It advises the insurer to keep raising its added value on the platform until the other parties do nothing but carry risk and run local operations. Put another way, the winner is the enabler who carries value upward; the loser is the one who merely rents out its capacity.

Why the picture is sharper for Turkey

This image is especially pointed for Turkey. There’s a strong bancassurance tradition and a large number of mid-sized insurers without a strong independent customer base. BCG’s description of the “most at-risk group” maps here almost exactly. Banks and large distribution networks largely hold the contact with the customer; the insurer is often already the party carrying risk in the background.

When the same embedded-insurance and AI wave fully reaches this market, the insurer that is only capacity will grow even more invisible. As price and convenience level out, standing in the background and carrying risk stops being a position on its own. Then the question in front of the Turkish insurer gets simpler: will we stay a replaceable capacity behind the bank or the platform, or become an indispensable infrastructure provider through risk intelligence, product design and data?

Closing

I see becoming an enabler not as a surrender but as a position. The courage isn’t in being able to let go of customer ownership; it’s in staying the owner of the value while you let it go. Rent out your capacity and you become a commodity. Hold on to your intelligence, your product and your customer experience and you stay indispensable. In a world where anyone can be an insurer, the difference won’t show in who sells the insurance. It will show in who actually builds it better.