Industry Insight: The Unbundled Insurer and What AI Means for Claims

Background: The Insurance Value Chain Is Splitting Apart

A recent Insurance Journal viewpoint describes how the insurance value chain is fragmenting. Between a Florida roofing contractor and the capital behind his general liability policy sits a chain of participants: a retail agent, a wholesale broker, an underwriter, a licensed carrier, a reinsurance panel and, increasingly, a pension fund or credit manager. For about a hundred years, most of that chain lived inside one carrier. The carrier underwrote the risk, issued the paper, paid the claims, held the data and put its own surplus behind the promise.

The article argues that this model is separating into capital providers focused on investing and service firms that handle underwriting, distribution, program administration and claims. It notes that consultants predicted this "virtual insurance company" model in 1999. The prediction was early, not wrong, and AI is now accelerating the breakdown.

Key Developments Reported

MGAs Are Taking a Larger Share

• Conning's 13th annual MGA study describes a "migration of underwriting expertise" from carriers to managing general agents.
• MGAs wrote roughly $128 billion of U.S. premium in 2025, up 12% in a year when the overall market grew 5%.
• MGAs' share of U.S. premium rose from 3.6% in 2012 to about 11.6% in 2025.
• In Conning's survey, 61% of insurers said they are expanding their use of MGAs, and none said they plan to cut back.

Fronting Carriers Are Growing Even Faster

• 78% of MGAs use a front to access capital.
• Fronting premium grew almost 400% in five years, from $6 billion in 2020 to over $22 billion in 2025, according to Conning.
• Large carriers such as Chubb and Berkley will continue to manage everything under one roof. The marginal dollar, however, is being deployed through the intermediated model.

What Remains Is a Balance Sheet

When underwriting and licensed paper are pulled out of a carrier, what remains is a balance sheet and an investment portfolio. The article says the carrier then begins to look more like an investment manager than an insurance company. It cites Howard Hughes Holdings' $2.1 billion acquisition of Vantage, which closed in June, and the handing of the insurer's investment portfolio to Pershing Square.

Impact on Public Adjusters and Policyholders

The article is about market structure, not a court ruling. Still, the trend has practical consequences for anyone handling a property claim in Florida.

• The decision-makers may be harder to identify. The entity that underwrote the policy, the licensed carrier that issued it, the program administrator that handles claims and the capital provider that bears the loss may all be different companies.
• Claims handling may be delegated. If claims are handled by a program administrator or a third party, a PA may be dealing with a firm that has no balance-sheet stake in the outcome. Authority limits, escalation paths and reservation-of-rights letters deserve close reading.
• The policy paper matters. The licensed carrier named on the declarations page is the party legally bound by the policy and by Florida's claims-handling statutes, no matter how many intermediaries sit behind it.
• Data and AI are moving into the chain. The article says AI is accelerating fragmentation. Policyholders and PAs should expect automated tools to play a growing role in underwriting and claims triage, and should document every communication.

Practical Takeaways

1. Identify every party early. Ask in writing who issued the policy, who is adjusting the claim and who holds settlement authority.
2. Keep deadlines tied to the licensed carrier. Notice, proof-of-loss and response deadlines run against the insurer named in the policy. Do not assume that a communication to an MGA or administrator satisfies a policy or statutory requirement without confirming it.
3. Preserve the claim file. Request the complete claim file, including any adjuster reports and notes, and save all correspondence with every intermediary.
4. Escalate disputes with the right party. If a delegated administrator is unresponsive, send a written demand to the carrier of record and keep the administrator copied.
5. Verify new carriers. Fronted and MGA-written programs can be new to a policyholder. Check the carrier's licensing and financial standing through the Florida Office of Insurance Regulation.

This article summarizes industry reporting. It does not state a legal holding, and its figures come from the cited Conning study as reported by Insurance Journal.

How Louis Law Group Can Help

When claim responsibility is spread across agents, MGAs, fronting carriers and administrators, delays and finger-pointing can follow. Louis Law Group represents Florida policyholders and works with public adjusters on disputed, delayed and underpaid property damage claims. We can help identify the responsible carrier, review the claim file and enforce the policy. If your claim is stalled, call us at (833) 657-4812 for a consultation.

Source: Insurance Journal - Viewpoint: The ‘Unbundled’ Insurer Emerges in Age of AI as Value Chain Fragments