Consulting Firms Are Building Their Own Insurance Carriers

Episode 28 of Service Business Talks with Fexingo: Why consulting firms are launching their own insurance carriers instead of partnering with existing insurers. Lucas and Luna examine the case of McKinsey's partnership with a Bermuda-based reinsurer, and how Deloitte, PwC, and EY have followed suit with captives and risk-bearing entities. They explore the economics: consulting firms capture underwriting profit, control policy design for their clients, and create recurring revenue streams outside the traditional advisory fee model. The hosts discuss the regulatory hurdles, capital requirements, and conflicts of interest that arise when a firm that advises on risk also sells insurance. Specific numbers include the $2 billion in premium volume consulting-owned carriers now underwrite, and the 30% net margins some captives achieve versus the 15% typical of pure advisory work. They also touch on how this trend affects corporate clients who now must decide whether to buy insurance from their own consultant. The episode ends with a question: when does a consulting firm become an actual financial institution, and what does that mean for client trust? #Consulting #Insurance #McKinsey #Deloitte #PwC #EY #CaptiveInsurance #Reinsurance #RiskManagement #BusinessStrategy #ProfessionalServices #Advisory #Regulation #ConflictOfInterest #RecurringRevenue #ServiceBusinessTalks #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo