Adam Klauber, CFA, partner, and group head of the financial services and technology sector, examines the impact of AI on the operating margins and profitability of core insurance brokers in Insurance Distribution: Deep Dive on Broker Efficiency and AI. Specifically, he analyzes where operating margins are today, where they could be in five to 10 years, and how they get there. Four key factors that may drive margin expansion in the next decade include:
- Revenue scale leverage
- Centralization of middle- and back-office infrastructure
- Business mix shift
Cyclical factors, including higher inflation and interest rates
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