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How does the Value Chain of the Insurance Market look like?

Updated: Mar 7, 2023

The value chain of the insurance market consists of value chain steps and within each step various functional processes that are depicted in this post.

Although there are several value chain definitions available, we at MHBC will use the following definition, acknowledging that there may be better and more detailed ones. All posts will refer to this value chain or parts of it, when appropriate.

Value Chain Insurance Industry Germany
Value Chain Insurance Industry Germany

Each step represents a functional area with its functional processes, e.g. the funtional area "Product Development" encompasses the functional processes "market research" and "risk evaluation".

There are also cross functional area processes like the TOO processes (Tariff, Offer, Order processes) that work between the functional areas Product Development, Distribution/Sales and Underwriting.

Most likely all processes of one functional area are operated by one representative of the market players like carriers, underwriting agents (MGAs) and sales organisations (a separate expanded definition post will follow on this). E.g. the functional area "Product Development" is operated by carriers, wheareas "Distribution/Sales" by sales organisations. Nevertheless, there are more complex constellations possible, e.g. some functional processes of the area "Claims Management" are done by an underwriting agent and some by a carrier.


In the following, the functional areas as well as cross functional areas processes are listed and numbered.

Functional areas

  1. Product development

  2. Distribution/Sales

  3. Underwriting

  4. Policy administration

  5. Claims management

Cross functional area processes

  1. Tariff, Offer and Order processes (TOO processes)

  2. Documents and Data exchange processes

  3. Claims reporting and monitoring

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