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- 65% of SMEs Are Ready to Switch Carriers. Here’s Why.
65% of SMEs Are Ready to Switch Carriers. Here’s Why.
SMEs are growing fast, but most feel underserved by their current carriers. Digital speed, flexibility, and better service are now the deciding factors driving the shift.
Good morning, ! This week we’re breaking down China’s outsized 7.6% premium growth, the new regulatory pressure from whistleblowers, and a market where 65% of SMEs are unhappy with their carrier and ready to switch.
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DATA DIVE
The Satisfaction Gap
Only 35% of SMEs are happy with their insurance provider. The other 65%? Either stuck or shopping. It’s not just price; it's the complexity, rigidity, and lack of transparency in coverage. Yet the market is booming, projected to grow from $82B to $141B by 2033. 85% of SMEs are willing to buy insurance from nontraditional channels—think banks, Amazon, even social platforms. Add the rising demand for automated advisory tools (cost comparison, coverage clarity), and it’s clear: legacy carriers are on notice. If the industry wants to keep the SME market, it has to make insurance intuitive, not impenetrable.
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TREND OF THE WEEK
China’s Insurance Engine Is Outpacing the World
Global insurance premiums are expected to grow 3.1% in real terms in 2025, but that average hides a sharp divergence: China is projected to grow 7.6%, more than double North America (3.2%) and nearly 5x Western Europe (1.5%), according to Swiss Re.
What’s driving the surge? A mix of regulatory reforms, rising middle-class demand for health and life coverage, and digital distribution at scale. China’s state-driven financial modernization has also funneled capital into insurance as a long-term risk pooler—especially in retirement, property, and catastrophe lines.
Meanwhile, developed markets face sluggish growth amid demographic drag and mature saturation. Western Europe, in particular, is showing anemic premium expansion despite rising risks.
Why it matters: For global insurers and asset managers, China isn’t just a growth story—it’s becoming the growth story. FIG players without a China strategy (or at least an Asia hedge) risk being anchored in low-yield geographies while the insurance market rebalances eastward. (More)
MICROSURVEY
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DEAL OF THE WEEK
Majesco Acquires Vitech, Creating a Next-Gen Insurance Core Tech Giant
In a major consolidation play in insurance technology, Majesco (backed by Thoma Bravo) is acquiring Vitech (backed by CVC) to form one of the largest global players in insurance core systems. The combined entity will serve 375+ insurers, spanning P&C, Life & Annuity, Health, and Pension & Retirement, with deep footprints in the U.S., Canada, and U.K.
Why this matters: Majesco is already a force in cloud-native, AI-powered core platforms. Vitech brings scale in pension and retirement, a growing market under pressure to modernize. The resulting portfolio offers AI-native capabilities across underwriting, sales, policy admin, and customer engagement—precisely where legacy insurers are feeling the most pain.
CVC will retain a minority stake, signaling long-term conviction in the platform’s upside. Both firms are betting on AI acceleration across insurance and the urgency of SaaS transitions.
For insurers and PE observers: This isn’t just a tuck-in. It’s a clear sign that core systems—once slow, rigid, and under-invested—are now ground zero for AI-driven transformation and dealmaking. (More)
INSURTECH CORNER
The Great InsurTech Recalibration
Property InsurTech continues to retrace from its 2021 peak, when funding hit $3.0B across 147 deals. Since then, the market has eased into a discipline-first cycle: 2022 dropped to roughly $2.0B, 2023 to $1.45B, and 1H 2025 sits at just $481M. Behind the decline is a wholesale reset of valuations, capital intensity, and enthusiasm for unprofitable underwriting models. But the most important shift is the quiet rise of early-stage dominance, climbing to 46% of deals in 2025. Investors are rediscovering the value of workflow automation, analytics, and IoT-driven risk tools, while mid- and late-stage rounds compress under tighter multiples. The 2021 spike now looks like a liquidity-driven outlier—today’s builders are leaner, smarter, and far more unit-economic aware. (More)
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MACROECONOMICS
The Two-Speed Economy
U.S. GDP rose 3.8% in Q2 2025, but this isn’t your grandpa’s recovery — it’s a bifurcated grind. North Dakota, Texas, and New Mexico are booming thanks to energy and mining, while Arkansas shrank, and the District of Columbia flatlined. The top performers? Resource hubs flush with capital and commodity tailwinds. Manufacturing led nationally, with 1.1 percentage points of growth, driven by demand for durables, reshoring, and tech upgrades. Meanwhile, retail and government lagged — a drag on portfolios tied to consumer credit, municipal debt, and small business. (More)
COMPLIANCE CORNER
Whistleblowers: InsurTech’s Surprise Regulators
Whistleblowers have quietly become one of the most potent compliance risks for insurance and InsurTech firms. With the SEC Whistleblower Program offering 10–30% awards, insiders now have strong financial incentives to escalate concerns beyond internal channels. Regulators increasingly expect robust internal reporting frameworks, especially across distributed models with MGAs, brokers, and platform partners. Meanwhile, insurance-adjacent claims are rising, including disputes over whether SOX whistleblower actions fall under D&O coverage, and a surge in ESG-related allegations tied to greenwashing. For insurers, the threat isn’t just enforcement—it’s the reputational and cross-regulatory fallout triggered by a single tip. The compliance mandate is clear: strengthen internal systems, align governance and HR, and ensure product teams understand the shifting whistleblower-driven liability landscape. (More)
TWEET OF THE WEEK
"Never let the fear of striking out keep you from playing the game."
Babe Ruth