- Premium reports flatter channels for a year or more before the claims arrive to correct them.
- Claims-adjusted margin — ultimate claims, commission and acquisition netted off — is the only fair test of a channel.
- Ranked on that basis, most books reveal at least one high-volume channel that has never made money.
Every distribution report leads with premium. It is the number everyone can see on day one, and the number that decides where growth budget goes. The problem is that premium is the least reliable guide to whether a channel is worth having, because the claims that determine its real value arrive months later, long after the decision to lean into it has been made.
The lag that hides the loss
A channel can look like your star performer for a full year on premium alone. Then the loss ratio catches up, and you discover you have spent twelve months growing a book that loses money on every policy. By the time the blended portfolio numbers reveal it, the channel is large enough that fixing it is painful.
Why the averages lie
A healthy portfolio loss ratio can comfortably hide a handful of channels running well underwater, subsidised by the rest of the book. Retention, fraud propensity and claims severity all vary sharply between channels, partners and geographies. Averaging them together is how a loss-making route to market stays invisible for years.
The channel that writes the most premium and the channel that earns the most margin are rarely the same channel.
Measure margin, not volume
The fix is to load every channel with its true, expected claims cost, including development and fraud propensity, net off acquisition and commission, and rank them all on one comparable measure of claims-adjusted margin. Suddenly the picture inverts: the aggregator driving your volume charts may sit at the bottom, and a quiet direct channel at the top.
Then act at the right level
Ranking is only useful if you can act on it. Drilling each channel down to the partner, product and region driving its result tells you whether to grow, reprice or renegotiate, and gives you the evidence to defend that decision in a partner conversation or a capacity review.
None of this asks you to grow less. It asks you to grow where the margin actually is, which is usually not where the volume chart is pointing.