How carriers and agents can close the appetite gap

A costly friction runs through the insurance distribution channel. It wastes time, erodes trust and leaves money on the table. It is the appetite gap.

According to First Connect’s 2025 State of the Industry Report, 71% of agents struggle to understand carrier appetites, and 64% experience quote decline rates of up to 50% as a direct result. That is a serious structural failure baked into how agents and carriers communicate or rather fail to.

But we can close that gap. The appetite for change among agents is growing, and data shows that forward-thinking carriers are already proving what’s possible.

When an agent submits a risk without understanding where a carrier stands, everyone loses. The agent spends time working on something that was never going to fly, while the client waits longer and may receive worse service. The research also captures this dynamic: 86% of agents report product availability challenges, while 81% say customer expectations for quote speed have increased.

This friction affects both sides of the distribution equation, but its financial impact is especially significant for carriers.

Profitable growth starts with showing up for the right risks

For carriers, closing the appetite gap is not simply about improving agent experience. It is a direct lever for profitable growth.

When appetite signals are clear and accessible, carriers are surfaced to agents at the exact moment a risk matches underwriting intent. This increases submission quality, improves hit ratios and reduces the operational cost of reviewing misaligned risks.

Instead of relying on broad market visibility, carriers can compete where they are strongest. They receive fewer out-of-appetite submissions, underwriters spend less time declining business, and loss ratios improve because written risks better reflect the underwriting strategy.

In a market defined by margin pressure, profitable growth depends less on volume and more on precision. Distribution that aligns risk with appetite is how carriers achieve that precision at scale.

Back to basics to bridge the appetite gap

The path forward also requires something simpler: better communication about what carriers want agents to write. Many carriers have already recognized this and are treating appetite transparency as a strategic priority. Research shows that 56% of carriers now provide real-time appetite updates.

Agents’ top improvement requests — streamlined application processes, instant bindable quotes with data prefill and integrated quoting across multiple carriers — are all expressions of the same underlying need: better information earlier, so risk can be matched to appetite.

Another often-overlooked lever is agent onboarding. Investing in onboarding pays dividends over the life of the relationship. Research shows that 50% of carriers now use live training webinars or dedicated onboarding managers. Seventy-five percent complete agent appointments within one week, with half processing them in just one to three days. Carriers are beginning to treat onboarding as a strategic function rather than an administrative one.

One reason appetite transparency has historically lagged is the burden placed on carriers to translate underwriting intent into rigid technical formats. Many underwriting guidelines live in presentations, PDFs, broker guides and internal documents — formats rich in context but difficult to operationalize. Reducing the need for technical integration lowers the barrier for carriers to participate. When appetite can be communicated using existing materials and plain language, carriers can share intent more completely and update it more frequently. This improves submission quality without requiring large technology investments.

In many ways, the industry is returning to first principles. Appetite communication is moving closer to how it once worked, grounded in context and judgment but supported by tools that make those elements scalable and consistent.

Trust is also essential. For appetite intelligence to work at scale, that trust must run in both directions. Agents will abandon any system that delivers guidance misaligned with underwriting outcomes, while carriers will hesitate to share data if they fear misuse. Trust strengthens when carriers see measurable improvements in submission quality and underwriting efficiency, and agents experience fewer late-stage declines. When both sides benefit operationally and financially, appetite transparency evolves from a convenience into a shared infrastructure for profitable distribution.

Completing the jigsaw

The real benefits of better communication, onboarding and supporting technology emerge when they work together. If a carrier communicates appetite changes clearly but routes them through a poor platform, the problem is not solved. Similarly, a carrier with advanced underwriting tools but a slow onboarding process is only solving part of the problem.

Distribution advantage today is about timing and relevance. Carriers that make their appetite clear in usable, contextual formats are more likely to be presented to agents when a risk fits, rather than after multiple failed submissions elsewhere. Being visible at the right moment for the right risk does more than increase submissions — it improves the probability that the business written aligns with underwriting intent.

This appetite gap has persisted in insurance distribution for decades. That’s largely because fixing it required coordination across systems, processes and relationships that were never designed to work together. But all of it is changing.

The convergence of better data infrastructure, more sophisticated carrier platforms and agents increasingly willing to embrace digital tools creates a window for improvement. Carriers that invest in appetite transparency through real-time updates, embedded workflow signals and better onboarding practices will build distribution networks that give them a competitive advantage.

Closing the appetite gap is not a technology initiative or a process tweak. It is a strategic shift in how carriers and agents collaborate to match risk with intent. Carriers that prioritize clarity, accessibility and alignment in their appetite communication will not only improve agent relationships but also build more resilient, profitable books of business.

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Aviad Pinkovezky is CEO of First Connect. Contact him at [email protected].