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Insurance Distribution Tips for Start-Ups (2023)

Insurance start-up companies will have noticed how the public’s perception of protection has radically shifted in the past couple of years. Customers now expect more personalised and data-driven interactions with carriers. Over 74% of insurance customers prefer to use self-service insurance services, and 69% of people would be willing to share highly personal information (such as health data) in exchange for cheaper premiums. 

For insurance start-up brands, updating your distribution models to align with policyholders’ evolving preferences will be vital to securing lifetime customers. However, this is easier said than done, as companies will not only need the IT infrastructure to gather and process masses of insurance data. They will also need flexible systems powered by performance analytics tools to help them capitalise on new opportunities as they arise.

We previously outlined tips for choosing the best insurance distribution models to consider as a start-up brand in the insurance industry. We highlighted four main insurance distribution models and outlined some key attributes and things to consider if you’re looking to start a business in these sectors. 

In this post, we will look at recent (post-pandemic) research in lead generation, broker/agent distribution, MGAs, and insurance carrier business models and offer some advice for companies entering the insurance ecosystem in 2023. 

Lead generation

Lead quality is fundamental to insurance selling; the older the lead, the less value it has. Therefore, real-time lead delivery remains the more popular sales model for companies within the protection industry. In our previous article, we mentioned how lead gen start-ups need to consider carefully the types of leads they want to attract, as your partners will want assurance that your company can provide sustained volume. 

To that end, lead aggregators and resellers will need to be aware that in the last 12 months, the cost per acquisition (CPA) of PPC ads has increased by 91% and to plan their acquisition budgets accordingly. 

In addition, start-up lead-generation companies will see more demand from partners for high-quality data to accompany every individual lead. This could result in lead gen companies needing to increase their business costs to aid them in supplementing enquiries with more individualised data their partners can use to boost conversions. Plus, the FCA will be implementing new laws regarding financial promotions regarding who signs off on promotions and how they should be recorded for compliance purposes. 

This means more investment will also be required in lead delivery technologies. For instance, seek out platforms that allow lead gen companies to customise forms and lead response fields to strike the perfect balance between gathering enough insurance sales insight to boost conversions while simultaneously providing a simplified quote experience for the end customer.

Agencies and brokers

There are several different types of entities in the agency/brokerage group (also known as producers), including independent agents, brokers, captive agents, and wholesale brokers.

All business models are highly lucrative and come with their own benefits and challenges for start-up owners. Still, some of the critical issues all brokerages and agencies will face in the coming year is increased competition from both direct competitors and from larger carrier M&As (which accounted for 40% of all M&A deals in Europe in 2022). 

Insurance experts also estimate that the starting investment for opening a successful brokerage in 2023 could be as high as £250,000. This figure considers the impact of inflation on staffing and operations costs. Therefore, the best advice for start-ups in the insurance broker/agency industry is to invest in automated insurance software tools like Insly that help reduce the time and money spent on tasks such as processing commissions and managing interactions with customers. 


Managing general agents (MGAs) differ from brokers and agents as they have the authority to underwrite policies. This gives MGA start-ups more freedom in their risk selection capabilities. In addition, MGAs handle policyholder claims, giving them more fiduciary responsibilities in managing their book of business.

To that end, a recent survey of MGAs revealed that the value of risk management and a spotless track record has increased significantly. This makes it critically important for start-ups in this arena to know the financial health of their business in real-time. 

Insly’s full-cycle insurance toolkit comes equipped with specialised accounts and reporting functionalities that can help you drill down into risk selection data and test solutions to maintain profitability in the long term. It also provides automated bordereaux reporting capabilities, assisting firms in cutting back-office time and admin costs, further helping MGA start-ups improve their carrier relationships. 


Insurtech investment hit record highs worldwide in 2021 thanks to the emergence of platforms that make building, testing, and distributing unique value propositions easier. 

AI-powered platforms can streamline the whole insurance value chain from start to finish, making it more straightforward for new companies (such as embedded insurance providers) to enter the market. 

However, one of the key areas which start-ups need to be mindful of in the year ahead is improving customer service and ensuring that their direct customers can access service teams quickly. 

Currently, only one-third of B2C brands offer live chat functionality. Therefore, one of the easiest ways you can get ahead of the competition is to provide an AI chatbot that can aid customers in their enquires and provide start-ups with more data they can use to tailor their offerings and thus attract more customers. 

Designed by insurance industry experts, Insly can help your insurance start-up thrive

Whether you’re a carrier, agency, or MGA, Insly combines all the insurance distribution tools you need to run a successful start-up business. 

Get in touch with us now to book a demo and learn more about how our low-code insurance software solution can be tailored to meet your business needs.

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