Rethinking Insurance Distribution - Navigating Channel Conflicts on an Increasingly Brokered SME Battlefield

Abstract

This thesis examines how insurance companies can adapt their sales channel strategies in response to an increasingly brokered SME segment in the Swedish property and casualty insurance market. It builds on the observation that brokers and intermediary-led ecosystems are gaining influence over customer relationships, distribution access, and value creation. While prior research has addressed insurance intermediation and digital platforms, limited attention has been given to how insurers should strategically position themselves in increasingly brokered SME ecosystems, particularly in national contexts such as Sweden.

The study explores how broker consolidation, platform-like distribution models, facilities, Managing General Agents (MGAs), digitalization, and regulatory developments reshape insurers’ strategic position. Based on an exploratory qualitative design, empirical data were collected through 22 semi-structured interviews with insurers, brokers, MGAs, and industry experts.

The findings show that brokers increasingly strengthen both relational and structural power through customer interface ownership, ecosystem coordination, and control over distribution channels. As brokers occupy the “first screen” in customer interaction, insurers are at risk of losing relational proximity, customer insight, and strategic control. At the same time, MGAs emerge as specialized intermediary actors combining delegated underwriting authority with niche expertise, further blurring traditional roles in the value chain.

The thesis identifies two main strategic positioning approaches for insurers. First, insurers can act as ecosystem orchestrators by strengthening customer ownership and coordinating value creation across interconnected ecosystems. Second, they can position themselves as strategic specialists focused on underwriting excellence, niche expertise, and product competitiveness within intermediary-led structures. Overall, the study contributes to literature on insurance intermediation, platformization, and sales channel transformation by developing conceptual frameworks for understanding shifting power dynamics in brokered insurance markets, while positioning Sweden as a leading example of intermediary-driven insurance transformation.

Popular Abstract

When was the last time you thought about insurance? While rarely top of mind, insurance plays a crucial role in modern society by providing the security that enables individuals, businesses, and economies to function and grow. However, due to its low customer engagement and intangible nature, many individuals and firms remain under-informed. Combined with the fact that insurance is fundamentally a trust-based product, this creates a persistent information and trust gap between buyers and providers.

It is precisely this gap that insurance brokers leverage in building their business models. By comparing multiple insurers' offers and advising customers on the most suitable option, brokers build trust and drive transactions. In the Swedish market, recent technological developments have enabled brokers to increasingly serve smaller companies while maintaining profitability. As a result, the small-to-medium enterprise segment has seen a significant shift toward broker-mediated distribution, away from traditional direct insurer relationships. This raises an important question: what happens to market dynamics and customer experience when intermediaries gain increasing influence within the insurance ecosystem?

To address this, this study examines key market trends and their implications for Swedish insurers. It also assesses how these developments affect insurers’ power positions, dependencies, and strategic responses in an evolving market.

One of the most central findings is that customer ownership has largely shifted toward brokers. Brokers increasingly control the primary customer relationship through regular interaction and advisory roles, enabling them to significantly influence decision-making.

Second, the emergence of AI and digital technologies is reshaping market dynamics. While uncertainty remains regarding the pace and scope of disruption, it is clear that these technologies will significantly improve operational efficiency across the value chain. However, brokers may be particularly well positioned to benefit, as they can leverage digital platforms as scalable interfaces while spending more time with clients.

Third, brokers are expanding their role beyond traditional intermediation by integrating more deeply into the insurance value chain. If insurers do not adapt, they risk being reduced primarily to providers of risk capacity within the SME segment.

Taken together, the shifts in power, across both relationship and structural dimensions, illustrate movements indicating a power shift towards brokers, and away from insurers. Consequently, insurers must now internally assess who they are, who they want to be in the future, and how they can get there.

• author: Sandberg, Lovisa and Thor, Melker
• supervisor: Izabelle Bäckström
• organization: Department of Industrial and Mechanical Sciences; Production Management
• course: MIOM05 20261
• year: 2026
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering; Business and Economics
• keywords: Insurance Intermediation, SME Insurance, Insurance Brokers, Sales Channel Strategy, Platformization, Ecosystem Strategy, Broker Consolidation, Property and Casualty Insurance, Intermediary-driven Ecosystems, Customer Ownership, Insurance Distribution, Distribution Channels, MGA, Managing General Agents, Competitive Positioning, Value Chain Transformation, Ecosystem Orchestration, Strategic Specialists, Digitalization, Open Insurance, FiDA, Swedish Insurance Market, B2B Insurance, Structural Power, Relationship Power
• other publication id: 26/5350
• language: English
• id: 9234534
• date added to LUP: 2026-06-10 10:05:07
• date last changed: 2026-06-10 10:05:07