For decades, property and casualty (P&C) insurers have relied on two primary revenue streams: premiums and investment income. These traditional pillars have proven effective through various market cycles, but they may not be enough to secure long-term growth in today’s dynamic risk environment.

A growing number of insurers are recognizing the value of expanding their business models beyond these conventional channels — particularly through fee-based risk management services. While many insurers currently offer such services for free in hopes of reducing claims, the landscape is shifting.

Monetizing these services may soon become not only viable but necessary.
In an increasingly complex world of climate risk, technological disruption, and rising consumer expectations, insurers are beginning to view “predict and prevent” strategies as a new frontier for value creation.

The Untapped Opportunity in Risk Management Services
Many insurers already offer a variety of support mechanisms that fall outside the bounds of indemnity coverage. These include:

● Risk assessments for businesses

● Smart home device installations for personal lines

● Data-sharing platforms that alert clients to emerging threats

● Advisory services for hazard mitigation

Historically, these tools have been offered at no cost as a strategy to reduce future claims. But this model leaves a vast amount of potential revenue on the table. In truth, insurers possess unique expertise and data that can be packaged into high-value, subscription-style services.

As the industry shifts toward a more service-oriented model, monetizing these offerings could transform the economics of insurance — particularly for P&C carriers looking to supplement or stabilize premium-driven income.

Predict and Prevent: A New Business Model
The core idea behind this shift is simple: rather than merely reacting to losses after they occur, insurers can use data, technology, and advisory capabilities to help clients prevent losses in the first place.

This “predict and prevent” model could significantly reduce claims frequency and severity. But perhaps more importantly, it opens the door to recurring, fee-based revenues that are less volatile and more scalable than traditional underwriting profits.

This is not a wholesale replacement of existing insurance models — but a strategic augmentation. In practice, it means:
● Offering subscription-based home monitoring systems for weather, fire, or flood risk

● Providing commercial clients with dynamic, AI-driven risk analysis tools

● Developing modular risk advisory services for SMEs and high-net-worth individuals

These services may begin as add-ons but could evolve into standalone revenue lines for insurers — much like value-added services in other industries.

Commercial Lines Are Leading the Way
At present, most monetized risk services are concentrated in commercial lines. This makes sense — commercial clients typically face more complex risks, operate at larger scale, and are often willing to pay for loss prevention tools that protect profitability and compliance.

Examples of commercial fee-based services may include:
● Business interruption planning and simulation

● Cybersecurity risk scoring and remediation plans

● Real-time monitoring of fleet safety or industrial equipment

These services don’t just lower claims — they deepen client relationships and create stickier, longer-term contracts.

However, the next phase of growth may lie in extending these models into personal lines, especially as individual consumers become more attuned to smart home technologies, weather resilience, and risk awareness.

Consumers Are Ready — If the Value Is Clear
While individuals may be less accustomed to paying for risk management services than businesses, the market is changing. Increasingly frequent wildfires, floods, and weather events have made the value of prevention tangible to homeowners and renters alike.

Additionally, the rise of smart technology — from leak detectors to fire-resistant roofing — is creating a bridge between prevention and affordability. When coupled with insurance incentives or bundled offerings, these services can be positioned not only as practical but as economically beneficial.

To succeed in this space, insurers must:
● Simplify the value proposition: Make it clear how the service lowers risk and saves money.

● Bundle services effectively: Pairing prevention tools with insurance policies or loyalty programs can enhance uptake.

● Leverage data: Show clients how their risk profile is improving in measurable ways, reinforcing the utility of the service.

Designing the Right Fee-Based Offering
Building a scalable and sustainable fee-based service model is not as simple as putting a price tag on existing freebies. It requires strategic planning and disciplined execution.
Key considerations include:
● Market segmentation: Understand which clients are most likely to pay for risk services and tailor offerings accordingly.

● Pricing strategies: “Freemium” models, tiered subscriptions, or usage-based pricing can create flexible pathways for adoption.

● Partnerships: Collaborations with tech firms or third-party platforms can accelerate innovation while lowering development costs.

● Customer education: Many clients won’t know these services exist — or why they should care. Effective messaging and client training are essential.

Equally important is the insurer’s ability to quantify and communicate value — whether through avoided losses, reduced premiums, or better coverage access.

Competition and Collaboration: A Blurred Line
Insurers aren’t alone in recognizing the opportunity in monetized prevention. Brokers, tech companies, and risk consultancies are all moving into this space, offering data-driven tools and advisory platforms directly to end users.

This presents a competitive threat — but also a collaborative opportunity. Insurers may choose to partner with established platforms or build co-branded services that leverage their underwriting expertise while benefiting from outside innovation.

Just as embedded insurance has grown through ecosystem partnerships, fee-based risk management may thrive through hybrid models, blending in-house capabilities with third-party distribution or data integration.

Don’t Just Insure — Enable Resilience
As risks grow more complex and interconnected, the insurance industry must evolve beyond its traditional boundaries. Premiums and claims will always be core — but sustainable growth lies in becoming an active partner in resilience, not just a passive payer of losses.

Fee-based risk management services offer insurers a way to diversify revenue, deepen customer relationships, and differentiate themselves in a crowded market. More importantly, they allow insurers to play a more proactive role in making individuals and businesses safer, smarter, and more prepared.

The time to act is now. Clients are demanding more than coverage — they want clarity, tools, and control. By meeting those expectations with credible, valuable services, insurers can position themselves not only as risk carriers, but as essential partners in the protection economy.