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Article by Jonathan Rusby, Director of P&C (EMEA)
The past ten months have changed the economics of commercial insurance in ways that are still playing out across the market.
A sustained period of rate softening has made margin more sensitive, cost more visible, and growth harder to deliver through pricing alone. For many carriers, what was once a question of where to grow the top line has become something more complex: how to maintain performance while absorbing continued pressure on pricing, terms, and ultimately profitability.
In that environment, the conversation naturally shifts. It becomes less about opportunity in isolation and more about how that opportunity is operationalized.
For many carriers, that is bringing the downstream question back into sharper focus.
The Downstream Opportunity is Real, but so is the Constraint
The SME and mid-market have long been regarded as one of the most significant structural opportunities in insurance.
The scale is well understood, as is the demand, and the gap between exposure and coverage continues to be material across many industries and geographies. This is not a new discovery, nor is it a short-term trend. The underlying fundamentals remain strong.
What has changed is the context in which that opportunity is being pursued.
In a softening market, the rationale for moving downstream evolves. It is no longer driven purely by growth ambition, but increasingly by the need to build a more resilient, diversified, and cost-efficient portfolio that can withstand continued pricing pressure in the core book.
For multinational carriers, however, seeing the opportunity is only the starting point.
The more difficult question is how to execute against it at scale.
Why Replication Breaks the Model
Historically, the approach has been relatively straightforward, and entirely rational.
Build capability locally, adapt to the specifics of each market, configure systems as required, and replicate the model where there is value to do so. In isolation, and over shorter time horizons, this works well enough.
At scale, however, the limitations of that approach begin to compound.
Each new territory introduces its own set of requirements, including different product configurations, data structures, underwriting processes, regulatory constraints, and integration needs. Over time, this results in an increasingly fragmented landscape of systems and processes that are difficult to evolve, expensive to maintain, and hard to govern consistently.
In a favorable pricing environment, that complexity can often be absorbed.
In a prolonged soft market, it cannot.
As margin compresses, the ability to operate efficiently across markets becomes just as important as the ability to enter them.
The Shift from Local Optimization to Shared Capability
What is becoming increasingly clear is that the carriers making meaningful progress are approaching the problem from a different starting point.
Rather than optimizing each market individually, they are investing in shared capability that can be applied consistently and adapted where necessary. This does not mean forcing uniformity across the organization, nor does it require every market to operate in exactly the same way.
Instead, it is about establishing a consistent operational foundation that supports variation at the edges without requiring complete reinvention in each new territory.
In practice, that involves creating common data structures that can flex by jurisdiction, building configurable products that can be adapted without redevelopment, applying underwriting logic in a consistent manner while accommodating local nuance, and designing workflows that are reusable rather than rebuilt.
This is what begins to make scale both achievable and sustainable.
Download the Multinational Modernisation Guide
If you are exploring how to build this kind of shared operational capability across markets, we have set out a practical framework in our Multinational Modernisation guide, including how leading carriers are approaching standardization without sacrificing flexibility.
Why AI Only Works when the Right Foundation is in Place
AI is often positioned as the primary enabler of this shift, but in reality, its role is more dependent on what sits underneath it.
In fragmented operating environments, where data is inconsistent, workflows vary widely, and systems are disconnected, AI has relatively little to work with. Its impact is limited not by its capability, but by the structure surrounding it.
Where it becomes genuinely useful is in environments where that structure already exists.
When data is consistently defined, workflows are orchestrated, and decision pathways are clear, AI can begin to enhance how the operation functions. It can support data ingestion and structuring, assist with risk segmentation, enable more effective triage, and help ensure that decisions are routed and prioritised appropriately.
In that sense, AI is not the starting point.
It is an enabler, but only within a well-defined operational model.
The Role of a Modern Core
This is where the concept of a modern operational core becomes central to the discussion.
Not as a replacement for existing systems, and not as a centralized mechanism that imposes a single way of working, but as a configurable, API-enabled foundation that supports how the business needs to operate at scale.
This type of capability allows carriers to build downstream underwriting functions once and then adapt them across markets, rather than reconstructing them repeatedly in different forms. It enables integration with existing core systems while avoiding the need for wholesale transformation, and it supports multiple products, distribution models, and territories within a unified operational framework.
This is how INSTANDA is positioned in this context.
As the platform that allows carriers to build a dedicated downstream underwriting function that is configurable, integrated, and capable of supporting multiple markets and product variants without requiring a multi-year transformation programme.
The result is not simply increased efficiency.
It is a fundamentally different cost structure, one that aligns with the volume and margin profile of downstream business, rather than inheriting the constraints of legacy models.
From Fragmented Expansion to Structured Growth
The difference between these approaches becomes increasingly evident over time.
Carriers that continue to expand market by market often find that complexity and cost grow in parallel with volume, limiting the overall benefit of that expansion. By contrast, those that invest in a shared operational foundation can scale more effectively, adapt more quickly, and maintain greater control over the economics of their business.
Over time, that difference compounds.
It becomes not just a question of accessing the downstream opportunity, but of doing so in a way that is sustainable across cycles.
The Real Measure of Scale
In a softening market, scale takes on a slightly different meaning.
It is no longer defined simply by the ability to write more business, but by the ability to do so without proportionally increasing cost or complexity.
That requires a shift in how infrastructure is understood.
Rather than supporting individual markets in isolation, it needs to connect them, creating consistency where it matters and allowing flexibility where it is needed.
How Leading Carriers are Approaching it
Across the market, a clear pattern is beginning to emerge.
The carriers that are best positioned have recognized that downstream requires its own operating model, built capability that can be reused rather than recreated, introduced an operational core alongside their legacy systems, and embedded automation and AI directly into workflows rather than treating them as separate initiatives.
These are not transformation programmes in the traditional sense.
They are deliberate, pragmatic changes to how the business operates.
Explore the Full Framework
If this challenge is familiar, the detail behind how to approach it matters.
In our Multinational Modernisation guide, we explore how carriers are:
- Standardizing underwriting infrastructure across markets
- Designing downstream capability for both efficiency and scale
- Embedding automation and AI into operational workflows
- Reducing complexity while increasing adaptability
Download the Multinational Modernisation whitepaper or simply contact us for a discussion on what’s possible.
