Brokers Are Underselling Risk Management as AI Makes Insurers More Selective

Why Brokers Rarely Lead Client Conversations with Risk Management

Kieron Burrows, head of broking and distribution at eCovers, says commercial brokers are not selling risk management as a core part of the insurance conversation. Many only raise it at renewal, he said, and at the point of sale their focus is mainly on the sale itself. That means clients miss the message that insurers are starting to judge them on how seriously they manage risk.

Part of the reason is economic. Burrows said risk management services commonly cost £1,500 to £5,000, and when a competing broker recommends no such outlay, the conversation becomes harder. Brokers also tend to stay within the products they know and are pushed by sales targets, so recommending extra spend can feel against their immediate interest.

His site-visit examples show how quickly hazards become visible. At a concrete firm, workers had used loud machinery without ear defenders until the business made them compulsory; a later visit found wood chippings packed around space heaters, which was cleared by the next one. At an airline food manufacturer with about £1 million in annual premium against £1.1 million in claims, a colleague slipped within the first minute of a visit and an unsecured trolley rolled into the manager. After the company overhauled its practices and installed cameras, claims largely dried up within two or three years.

Burrows expects insurers to become more selective, using AI to identify risks they believe will produce claims. A business that shows no interest in risk management may face a very high premium or be passed to an MGA, he said. He also predicted a very soft market within five years, with potentially a large gap between what careful and careless businesses pay for cover.

What AI Screening and Broker Incentives Mean for Commercial Cover

Burrows' account describes a distribution system that rewards transaction volume more than client risk improvement. The current behaviour is not simply a lapse in sales technique; it is built into renewal-focused conversations and sales targets.

The Broker Incentive Problem

At the point of sale, brokers are judged on revenue, and the £1,500 to £5,000 cost of risk management can undermine that conversation when a competing broker asks for nothing extra. That creates a two-tier broking market: those who can demonstrate the financial value of risk management and those who cannot. The gap may start to show in renewal retention as AI-driven insurers quote more selectively.

AI Screening and the Pricing Split

Burrows says some insurers already use AI to decide whether a risk reaches an underwriter for a quote, with the underwriter then setting the rate. If that becomes standard, the practical effect is triage: clearly well-run risks get preferred terms, obviously poor risks are priced or declined, and the middle group faces hard choices. MGAs become a release valve for accounts conventional insurers reject.

He also expects insurers to accept smaller books in exchange for better profitability. That suggests underwriting profit is becoming more important than premium volume, and AI gives insurers a cheap way to identify which accounts to keep.

What the Gap Means for Clients

The most receptive clients are usually the obviously hazardous and the already excellent sites: the first want fixes, the second want reassurance. The problem group is the middle: reasonably tidy, long-serving staff and no appetite for another £5,000 outlay. Burrows expects the widening price gap to persuade some of those firms to pay for risk management, even as the service itself becomes more expensive. If he is right, firms that delay will pay twice: higher premiums now and higher advisory costs later.

What Commercial Brokers and Business Owners Can Do Before AI Pricing Bites

The practical lesson is that risk management is becoming a pricing variable rather than an optional extra. Here is what the relevant players can do with the specifics Burrows describes.

• Brokers should make risk management part of the point-of-sale conversation, not a renewal afterthought, and build a simple before-and-after case like the airline food manufacturer's claims reduction after cameras and process changes.
• Brokers should address the £1,500 to £5,000 objection directly by calculating the client's premium and claims exposure against that fee, especially for mid-tier businesses that are reasonably tidy but resistant.
• Business owners should treat the two-minute site walk as a test: fix obvious hazards such as missing ear defenders, blocked window grates and unsecured trolleys before insurers' AI screening records the condition of the risk.
• Businesses in the middle risk category should act now on process changes and documentation rather than wait for a higher premium or an MGA placement, since Burrows expects the service itself to become more expensive.
• Brokers and clients should prepare for selective quoting by keeping records of risk improvements, because the predicted split between good and poor risks will determine who reaches a standard underwriter at all.