It’s no secret that insurance is crucial for protecting companies from unpredictable events that could otherwise severely harm their bottom line or their reputation. But in recent years, many new companies have found it difficult to access that protection. Premiums have surged to levels that strain corporate budgets, coverage gaps leave companies vulnerable at the moment of crisis, and the entire structure depends on foreign reinsurance capacity that most American executives don’t realise controls their fate.
Recent events have only made those challenges more urgent. The California wildfires of early 2025 exposed many companies to unforeseen situations that they couldn’t cover, and the scale of dysfunction has drawn federal attention. The One Big Beautiful Bill Act, signed into law in July 2025, only further intensified national debate over coverage affordability and the incentive structures embedded in insurance markets, signaling that the status quo is facing scrutiny at every level.
Andrei Craciunescu, founder of San Francisco-based startup RiskCube, is building one answer to these structural problems. RiskCube is an independent brokerage that uses a single questionnaire to query the market and show side-by-side comparisons that allow venture-backed startups to make informed decisions that fit their budget.
Broken Incentives Drive Premium Inflation
The US insurance market generates over $1.1 trillion in annual premiums, ranking among the largest sectors in the American economy. Berkshire Hathaway, UnitedHealth Group, MetLife, and Prudential stand among the most valuable corporations by assets and market capitalisation.
Yet premiums have only surged in recent years, particularly in high-risk states like California, Texas, and Florida, while coverage quality has declined through multiplying exclusions and fine-print limitations.
The broker compensation model sits at the center of this dysfunction. Brokers earn commission as a percentage of premium, meaning higher prices directly increase their income. This structure basically gets rid of any financial incentive to find quality coverage at lower cost, simply because recommending expensive policies is far more profitable than recommending efficient ones.
But over the years, there’s been a new rise in analytical tools that can find lower-premium options and bring genuine price transparency to the market. Yet many traditional brokers have consistently refused adoption because the technology threatens their revenue. A broker presented with, for example, software that could save a client 30% on directors’ and officers’ (D&O) coverage has no incentive to deploy it when that savings means they get a reduced commission. The resistance to these tools has kept the market opaque and prices artificially elevated, even as the technology to fix the problem has existed for years.
Because of this, startup founders and CFOs alike have questioned the value proposition of insurance itself, paying more each year for less protection and less transparency.
Talent Flows Away From Those Who Need It Most
A problem compounding this dysfunction is the severe talent imbalance within the industry. The best analytical minds in insurance gravitate toward the largest premiums, leaving startups, small and medium enterprises, and emerging businesses with inexperienced advisors despite facing the most complex coverage needs.
Fortune 500 companies attract top-tier broker expertise while venture-backed startups, often managing millions in investor capital, struggle to access competent guidance. ‘The best brokers in the world are working for the Disneys, Coca-Colas, Pepsis, and so on’, Craciunescu notes. ‘That’s where the whole expertise is going. But there’s no expertise going to the companies that really need it when they get established.’ An aging workforce exacerbates the shortage, as fewer young professionals start entering this field, concentrating expertise further among those serving enterprise clients and leaving emerging companies without qualified advisors at critical moments.
Beyond talent allocation, a fundamental geographic mismatch defines how global insurance is organised. The United States comprises roughly 40% of the global market, yet the companies that backstop this risk are overwhelmingly European. Munich Re, Swiss Re, and Hannover Re dominate the top three positions among global reinsurers, and over 60% of US reinsurance premiums are now ceded to offshore carriers, up from 44% two decades ago.
The intellectual capital driving global reinsurance pricing sits in Munich and Zurich, with places like the Technical University of Munich producing risk analysts just next to the world’s largest reinsurers, creating a geopolitical vulnerability that few American executives recognise.
RiskCube: Building an Independent Alternative
RiskCube approaches the incentive problem by incorporating a proprietary risk model, built from scratch to analyse startup risk profiles and recommend appropriate coverage, directly inside an independent brokerage. The platform offers founders a single questionnaire that queries the entire insurance market, returning side-by-side comparisons that go beyond single-carrier quotes.
This seeks to address a common frustration. When startups seek insurance, they find brokers and carriers offering coverage, but most companies with investors or board requirements need more than one quote to compare prices, and many founders get stuck repeating the same process with multiple providers, sometimes even settling for the first quote they find out of sheer exhaustion.
RiskCube’s AI-powered analysis examines policy language to look for exclusions, coverage gaps, and scenarios where a claim would likely be denied, bringing enterprise-grade scrutiny to startup clients who may have previously missed out on such resources.
The model bets on long-term customer relationships. Lower premiums mean lower commission per deal, but satisfied customers refer others and stick with a company through renewals and funding rounds. ‘We bet on the long-term game’, Craciunescu explains. ‘When we earn trust from customers, we get more customers that bring new customers in because they trust the process, having a transparent process of buying.’
What Transparency Could Change
If transparent, comparison-based models gain traction, carriers would face genuine price competition for the first time, potentially reversing years of premium inflation. Better transparency could be key to building trust in an industry that’s known to provide its clients with opaque pricing and conditions that are hard to decipher.
American businesses would benefit from lower insurance costs, freeing capital for investment and hiring rather than premium payments with uncertain protection. Investors backing startups would see improved capital efficiency, with venture funding flowing toward building companies rather than overpaying for coverage that may not pay out when needed.
‘This should bring prices down because if the provider needs to compete now for the same risk and it’s more transparent, American businesses will win because they are not dependent’, Craciunescu said.
A more competitive US insurance market could also be key to attracting underwriting talent and jobs back to American soil, building domestic capacity to properly analyse and price risk without having to cede that expertise to European reinsurance hubs. Over time, these sorts of successful independent models could pressure traditional brokers to reform compensation structures or lose market share to transparent competitors.
Making Insurance More Transparent
The path toward models like RiskCube becoming an industry standard requires a fundamental reform of broker compensation structures. For Craciunescu, the US needs to invest more in domestic risk analytics capacity to reduce dependence on European reinsurers, building the intellectual infrastructure that currently concentrates in Munich and Zurich.
Additionally, technology adoption can’t remain optional, and brokers resisting analytical tools that add value to customers but threaten commissions will face competitive pressure from transparent alternatives if they don’t keep up or change their services.
Andrei Craciunescu and RiskCube represent one attempt to demonstrate that a different model can work, one that puts pricing transparency and aligned incentives at the forefront under the belief that insurance must return to its core purpose: protecting businesses against genuine risk in a cost-effective manner.