AI Is Breaking the Old Rules of Monetization

Introduction The rules that governed software pricing for a decade are breaking down. Per-user SaaS models made sense when users were people. Now that AI is automating those seats, the pricing logic collapses — and carriers, brokers, and insurtech vendors are all rethinking the economics at the same time. Michael Nadel is a partner and head of the global insurance practice at Simon-Kucher & Partners. He joined Josh Hollander for his second appearance on the show to dig into what the AI era is actually doing to monetization — from the pricing mistakes early movers keep making, to why outcome-based models are harder to execute than they are to sell, to a 50,000-session LLM shopping simulation that revealed what could become the next SEO arms race for insurance carriers.   Guest Bio Michael Nadel is a partner and head of the global insurance practice at Simon-Kucher & Partners, a global strategy consultancy focused on growth, pricing, and monetization. Before consulting, he spent time at CNA in strategy and innovation, and earlier led large-scale financial services implementation work at Accenture. He advises carriers, brokers, MGAs, and insurtech vendors on pricing strategy, and co-hosts an annual monetization masterclass at InsureTech Connect.   Key Topics From offense to defense — A year ago, clients asked how to monetize new AI features. Today the questions are more defensive: how does AI threaten my core product, my pricing model, and my existing revenue base? The two biggest AI pricing mistakes — Pricing before understanding what customers actually value, and jumping to outcome-based models before you can define or reliably deliver the outcome. Outcome-based pricing is the destination, not the shortcut — Buyers love paying only when value is delivered. The problem is definitional complexity — what counts as the outcome, who controls it, and what happens when results fall short. AI spend that looks like RPA in new packaging — Carriers running well-designed AI programs focus on workflow economics, not technology for its own sake. The recommended split: 70% on high-value workflow automation, 20% on data and governance, 10% on exploratory bets. GEO: the next SEO — Simon-Kucher simulated 50,000 insurance shopping sessions across 50 consumer personas and three major LLMs. What gets a carrier recommended by an LLM is not the same as what gets them ranked on Google. CMOs need to decide how to treat LLMs as a distribution channel now. Services businesses face the same disruption — Pure labor arbitrage is structurally challenged by AI. Firms that survive will combine domain expertise with AI-enabled delivery and evolve from vendors to partners.   Notable Quotes "You need to understand what people value before you prescribe a price. But very often, people build something, bring it to market, and then try to figure out why it isn't selling." "Automating a bad process simply creates a faster bad process." "It's not replacing system X with system Y — it's changing the way you work fundamentally. Orange juice to lemonade. Not a better way to make orange juice." "Last year, roughly one percent of our traffic came from LLMs. This year it was roughly five percent and increasing."   Resources Guest: Simon-Kucher & Partners: https://www.simon-kucher.com Michael Nadel on LinkedIn: (verify and add URL) Host & Organization: Joshua R. Hollander on LinkedIn: https://www.linkedin.com/in/joshuarhollander/ Horton International (USA): https://www.horton-usa.com/ Insurtech Leadership Podcast: https://www.linkedin.com/showcase/insurtech-leadership-show   Subscribe & Review If you enjoyed this episode, subscribe on your favorite platform and leave a review. The Insurtech Leadership Podcast is available on YouTube, Apple Podcasts, and Spotify.