Beyond Policy Placement: The Evolution of the Modern Insurance Broker

As risks become more interconnected and complex, brokers are expanding their role beyond policy placement, helping organizations improve resilience, manage total cost of risk and make smarter business decisions.

By: Maura Keller | July 14, 2026

For decades, insurance brokers were largely judged on their ability to secure coverage, negotiate favorable premiums and facilitate transactions between clients and carriers. While those responsibilities remain important, the modern broker’s role has expanded dramatically. Today’s risk environment, defined by cyber threats, workforce challenges, supply chain disruptions, regulatory complexity and rising claims severity, demands far more than policy placement.

As organizations face increasingly interconnected risks, brokers are being called upon to serve as strategic advisors, helping clients identify vulnerabilities, improve resilience and manage their total cost of risk. The evolution has transformed the broker-client relationship from a transactional arrangement into an ongoing partnership focused on long-term business outcomes.

“The conversation has shifted from transferring risk to building operational resilience,” said Jeff Cole, AVP of national accounts at Sentry.

That shift reflects growing client expectations.

“Clients expect more insight, faster answers and better outcomes,” said Pete Doyle, CEO U.S. Retail Brokerage at Gallagher.

“The environment is more complex. Risks are more interconnected, and better data is allowing brokers to do more for clients earlier in the process.”

A Shift Toward Strategic Partnership

The transformation of the broker role has accelerated over the past five years. According to Edward Cologgi, vice president, agent and broker services, Americas at Xceedence, clients increasingly view brokers as advisors who contribute to broader organizational planning rather than simply facilitating insurance transactions.

“Instead of focusing solely on policy placement and premiums, brokers now help clients navigate and understand a broad range of risks,” Cologgi said.

Michael Cusack, president of Alliant P&C, agreed that specialization and expertise have elevated the broker’s role.

“The role of insurance broker has become vital and strategic to complex placements, with insureds relying on industry specialization and expertise from their broker to understand and protect their unique risks in the marketplace,”
he said.

The strongest brokers now connect risk management strategies to operational performance, financial objectives and growth plans. Insurance remains an important component of risk financing, but it is no longer the sole focus.

Jeff Cole, AVP of national accounts, Sentry

“The strongest brokers partner with insurers and help customers connect insurance decisions to broader business strategy, not just renew policies,” Cole said.

Complexity Drives Demand for Advisory Services

The growing need for consultative brokerage services stems from the increasingly complex risks facing businesses.

As Cologgi explained, many market forces such as rising claims severity, inflation, escalating cyber threats, supply chain disruptions and increasing regulatory complexity are making risk management more challenging for businesses today.

Doyle noted that clients are operating in an environment where risks continue to stack and evolve simultaneously.

“Claims severity is up, cyber risks are constantly changing, weather volatility is increasing, supply chains remain fragile, and the regulatory environment continues to change,” he said.

“Clients need help connecting the dots, understanding impact and proactively making the best decisions for their business.”

Cusack pointed to nuclear verdicts and regulatory changes as additional pressures. “Clients are demanding to understand how best to structure insurance programs to maximize their cost of risk for both premiums and retentions,” he said.

Workforce-related risks have also become increasingly prominent. Labor shortages, an aging workforce and rising healthcare costs continue to affect organizational performance.

As a result, clients increasingly expect brokers to help them prioritize risks, allocate resources effectively and develop practical mitigation strategies. Many brokers now function as extensions of their clients’ risk management departments, particularly in the middle market where internal resources may be limited.

What Separates Great Brokers from Good Ones?

As the profession evolves, a clear distinction is emerging between brokers who primarily place coverage and those who deliver measurable strategic value.

“A broker that merely places coverage focuses primarily on obtaining insurance quotes, negotiating terms and securing policies,” Cologgi said.

“In contrast, a broker that delivers high-level risk management consulting takes a proactive approach by helping clients identify, assess and mitigate risks before losses occur.”

Doyle framed the distinction differently.

“A placement broker asks, ‘What coverage do you want to buy?’ A strategic broker asks, ‘What does your risk profile reveal, and what can we do to make it stronger?’” he said.

Similarly, Cusack believes expertise is the differentiator. “Clients are looking for in-depth industry expertise and specialization around their business, and a deeper understanding of their exposures and how to insure against them,” he said.

The most effective brokers invest time in understanding a client’s business objectives, operations, workforce challenges and growth plans. They also bring analytical capabilities to the table, including claims analysis, benchmarking, predictive modeling and risk-financing expertise.

In this model, success is measured not simply by premium savings but by outcomes such as reduced losses, stronger resilience and improved business continuity.

Looking Beyond Premiums

One of the most significant shifts in risk management involves a growing emphasis on total cost of risk (TCOR). Historically, many insurance purchasing decisions centered on premium reduction. Today, organizations are taking a more holistic view that includes retained losses, deductibles, claims administration expenses, operational disruptions and indirect costs.

“Leading insurance brokers are helping clients quantify and manage their total cost of risk by analyzing the full financial impact of risks,” Cologgi said.

Doyle emphasized that premium is only one component of the equation. “The full picture includes claims, retained losses, operational disruption, coverage structure and capital efficiency,” he said.

Using analytics, benchmarking and predictive modeling, brokers can identify the underlying drivers of losses and help organizations make informed decisions about prevention, retention and risk-financing strategies.

Cusack described the process as finding the optimal balance between retained and transferred risk.

“Finding the right intersection of risk transfer and risk assumption to maximize the cost of risk is the art form of being a sophisticated, proactive broker,” he said.

Technology as an Enabler

Technology is playing a central role in the broker’s evolution into a strategic advisor. Data analytics, artificial intelligence, predictive modeling and machine learning are providing brokers with unprecedented visibility into risk patterns and emerging threats.

“These advanced technologies are enabling brokers to move from reactive problem solving to proactive risk management,” Cologgi said.

Doyle believes technology’s value lies in accelerating analysis while improving decision-making. For example, Gallagher’s proprietary tools combine AI-driven analysis, market data and broker expertise to help quantify client risk profiles and identify improvement opportunities.

“Technology is making brokers better by speeding up analysis, but the real differentiator is how you apply it to your data,” Doyle said.

“These tools help benchmark performance, identify issues earlier and strengthen underwriting conversations.”

At Sentry, advanced analytics are helping identify injured workers who may need additional support earlier in the recovery process, enabling more proactive intervention. Still, experts agree that technology enhances rather than replaces broker expertise.

“AI may enhance the broker’s ability to provide data-driven analytics, but it will not replace the need for specialized industry knowledge and expertise,” Cusack said.

The Expanding Consulting Portfolio

As their advisory role grows, brokers are providing a wider array of consulting services.

According to Cologgi, organizations are increasingly seeking support in enterprise risk management, cyber risk assessment, claims optimization, regulatory compliance, business continuity planning and supply chain risk management.

Doyle said many clients are focused on areas where risk is changing most rapidly. “That includes cyber preparedness, claims analytics, business continuity, workforce safety, captives and broader risk mitigation planning,” he said.

“The common thread is resilience.”

Cusack echoed those priorities, noting that cyber preparedness has become a boardroom concern. “Being prepared for a cyber-attack is top of mind for every leader of any major organization,” he said.

Captive solutions have also gained momentum as organizations seek greater control over risk financing. Meanwhile, claims management and claims analytics have become increasingly important as companies look to improve outcomes and reduce costs.

“Claims management and claims analytics are extraordinarily important to ensuring that claims are managed effectively, efficiently and settled as early as possible,” Cusack said.

The Future Broker

As risk complexity continues to increase, experts believe the broker-client relationship will become even more strategic.

“Looking ahead, the broker-client relationship will continue to evolve toward a long-term strategic partnership centered on risk intelligence, business resilience and value creation rather than transactional insurance placement,” Cologgi said.

Future brokers will need a blend of technological sophistication, industry expertise and business acumen.

They will also need to work across multidisciplinary teams that may include cyber specialists, claims advocates, workforce consultants, captive experts and data analysts.

“The risks clients face no longer fit neatly into one box,” Doyle said. “The key is bringing those capabilities together in a way that feels seamless for the client.”

Clients increasingly expect brokers to remain engaged year-round rather than appearing only at renewal time. Trust, transparency and measurable outcomes also will continue to define successful relationships.

Ultimately, while technology will continue to reshape the profession, the broker’s value will remain rooted in expertise, judgment and advocacy.

“Clients will continue to demand industry expertise and specialization from their brokers,” Cusack said. “Understanding every aspect of a client’s business and the industry in which it operates is critical to deliver meaningful value in helping clients achieve the optimal cost of risk.”

That’s the nuts and bolts of the core dynamics of broker involvement in risk transfer and risk consultation.

But what will happen to the brokerage business model when technological advancements and changes in the way insureds buy insurance, i.e. going direct to carriers via online portals, plays out going forward? &

Based in Minneapolis, Minnesota, Maura Keller is a writer, editor and published book author with more than 20 years of experience. She has written about business, design, marketing, health care, and a wealth of other topics for dozens of regional and national publications. She can be reached at [email protected].

A Shifting Liability Landscape

Product liability risks are entering a new phase of complexity. Pricing pressures remain front and center, even as segments of the market begin to moderate. Capacity continues to fluctuate, attachment points remain elevated and underwriting discipline has tightened across higher hazard general liability and excess and umbrella layers.

Recent data reflects that reality. While U.S. commercial insurance pricing trended downward throughout 2025, insureds with significant product liability exposures continue to face challenges in securing optimal placements. A 2025 industry survey shows that 86% of independent insurance agents report challenges with market access and product availability as insurance carriers adjust capacity and underwriting strategies, highlighting that access to coverage limits remains limited for many complex risks.

Beneath these conditions lies a deeper issue: escalating loss costs. Social inflation continues to drive severity, with U.S. liability claims increasing 57% over the past decade due to rising litigation and large jury verdicts. These trends are reshaping how carriers deploy capacity and how clients access coverage.

While the market shows signs of softening, the underlying cost dynamics remain unchanged. “In an environment shaped by inflation, supply chain disruption and litigation volatility, these pressures are not only influencing pricing but also reshaping how organizations think about risk ownership and financing structures,” said Seth Hollis, head of specialty general liability at The Hanover. “Borrowed capacity is only one part of the equation. Retained risk is increasingly becoming another.”

For larger, well-managed organizations, self-insured retentions (SIRs) can serve as a powerful strategic lever, improving cost control and supporting long-term program stability. This not only serves as a strong selling point for agents but also enables them to better position clients within a challenging market.

Aligning SIR Strategies to Product Liability Risk Profiles

Seth Hollis, Head of Specialty General Liability, The Hanover

Product liability presents a risk profile that often aligns well with retained risk strategies.

Many organizations experience a pattern of predictable, lower-severity claims, while more catastrophic losses remain infrequent but impactful. Traditional insurance structures tend to price toward those high-severity events, driving premium costs even when day-to-day loss activity remains manageable.

For organizations with the right financial and operational profile, this presents a risk management opportunity. “Retaining a more predictable layer of risk can improve efficiency and total cost of risk over time, particularly for companies with strong safety controls and claims oversight,” Hollis said. “These organizations typically combine financial strength with operational discipline, supported by consistent cash flow, credible claims data and a long-term view of risk financing.”

In practice, SIR strategies can take multiple forms depending on the organization’s goals and risk profile. For example, a manufacturer with more frequent, predictable claims may retain a defined layer of risk, while another manufacturer facing less frequent but more severe claims may use an SIR to manage volatility while preserving protection for catastrophic losses. Larger commercial accounts may also use SIRs to gain greater influence over claims management outcomes, using retention to more closely align financial and operational controls.

The key is intentionality. SIRs should be designed around a well-understood risk profile, not introduced as a default response to market pressure.

From a carrier perspective, SIR structures also introduce alignment. When insureds manage claims within their retention, they tend to focus on preventing losses, handling defense strategically, and resolving matters more quickly. This alignment can lead to more sustainable results across the account.

The Value Equation: Cost, Capacity and Control

SIRs are often associated with premium savings — and for good reason.

By assuming a portion of risk, insureds can reduce the amount of exposure transferred to the carrier, which typically results in lower upfront premium.

However, that shift also introduces greater financial responsibility. Losses within an SIR are funded directly by the insured and may not be subject to an aggregate cap, requiring organizations to maintain adequate reserves and be prepared to absorb multiple losses within a policy period.

For organizations equipped to manage that responsibility, the value of an SIR extends beyond immediate cost savings:

Improved access to capacity: SIR structures can make complex product liability risks more attractive to carriers, supporting greater willingness to deploy limits.
Enhanced program structure: Flexibility exists to tailor retention levels across different product lines within a general liability program, allowing organizations to align retained risk with their operations.
Long-term cost stability: Reducing fixed premium costs while retaining predictable losses can lead to a more stable total cost of risk over time.
Greater claims influence: Organizations gain more direct oversight of defense strategy, legal expenses and settlement decisions within the retention.

Amid ongoing economic uncertainty and litigation volatility, these benefits can help organizations achieve more consistent and predictable risk outcomes.

Claims Management: The Critical Differentiator

The effectiveness of an SIR program ultimately depends on claims execution.

Managing losses within a retention requires discipline, speed and coordination. “Organizations need the ability to respond quickly to incidents, engage legal resources effectively and resolve claims before costs escalate.” Hollis said. This requires dedicated internal risk management leadership or strong alignment with third-party administrators, supported by clearly defined escalation protocols for more complex claims. A consistent legal strategy, backed by experienced counsel, plays a critical role in maintaining control over outcomes, while ongoing monitoring of claim trends helps ensure that lessons learned are continuously applied.

Even above the retention, carrier expertise remains essential. It provides loss analytics, benchmarking insights and strategic guidance that support the retained layer, help protect excess policies and drive a lower total cost of risk over time.

When these elements are aligned, SIR programs can perform as intended — improving outcomes at both the primary and excess layers.

Guiding the Client Conversation

For independent insurance agents and brokers, SIRs represent an opportunity to elevate the conversation around risk management for the right clients.

The most effective discussions move from “taking on more risk” to focusing on structuring risk more strategically. This includes aligning retention levels with a client’s operational realities and financial tolerance, identifying losses that may already be absorbed indirectly through inefficiencies or premium structure, and assessing readiness to manage claims within a retention framework. SIRs can be thoughtfully positioned as a proactive strategy rather than a reactive adjustment.

There are also clear advantages for agents. SIR solutions are not widely utilized across the middle market, creating differentiation in how programs are structured. As clients grow in size and sophistication, SIRs offer a pathway to evolve coverage without displacing existing relationships.

“This evolution supports long-term partnerships, allowing agents to guide clients from more traditional risk transfer agreements into increasingly sophisticated risk financing strategies over time.” Hollis said.

The Importance of Carrier Partnership

Carrier selection becomes especially important in SIR programs.

Not all insurance carriers are equipped to support retained risk structures, particularly in complex product liability environments. Even among those that can, many limit loss-sensitive program offerings to national account clients, where qualifications often depend on workers’ compensation being structured on a loss-sensitive basis. “The most effective partners bring a combination of specialized underwriting expertise in product liability and dedicated claims resources that extend beyond traditional coverage,” Hollis said. “They also provide loss control and risk solutions that help insureds better manage exposures within the retention.”

Some carriers, like The Hanover, have dedicated complex general liability teams that can offer SIR structures on general liability programs for a range of customers. They can also maintain guaranteed cost structures for other lines, allowing clients to take on risk selectively where it aligns with their strategy. These capabilities enable more tailored program design as client needs evolve.

In complex liability segments, specialization matters. Precision in underwriting, claims and risk advisory support can significantly influence outcomes across the entire insurance program.

A Strategic Path Forward

Self-insured retentions are not a universal solution, but in today’s product liability landscape, they are increasingly relevant. Market dynamics will continue to evolve, while underlying loss trends — driven by litigation costs and severity — remain persistent. Organizations that take a deliberate approach to retained risk today are better positioned to navigate the market cycles of tomorrow.

For qualified insureds, SIRs can improve access to coverage, stabilize costs and introduce greater control over claims outcomes. For agents and brokers, this presents an opportunity to grow alongside clients by delivering more value-added strategic advice and placing business more effectively in challenging markets. Partnering with carriers like The Hanover that have the expertise and flexibility to support retained risk structures is critical. Together, these relationships help build insurance programs that are more resilient and better meet customer needs.

To learn more, please visit: https://www.hanover.com/

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with The Hanover Insurance Group. The editorial staff of Risk & Insurance had no role in its preparation.

The Hanover Insurance Group, Inc. is the holding company for several property and casualty insurance companies, which together constitute one of the largest insurance businesses in the United States. The company provides exceptional insurance solutions through a select group of independent agents and brokers. Together with its agents, The Hanover offers standard and specialized insurance protection for small and mid-sized businesses, as well as for homes, automobiles, and other personal items. For more information, please visit hanover.com.