Will Artificial Intelligence “Replace” the Independent Agent?

Independent Agent & AI: Friend or Foe? AI won't replace agents, but those who use it will thrive. Learn how AI can streamline tasks & boost client service.

a month ago   •   3 min read

By The ReFocus Team
Photo by Brett Jordan / Unsplash

We are currently in the midst of an undeniable Artificial Intelligence (AI) revolution. The topic dominates discussions at conferences, carrier meetings, and agency gatherings. As always, disruption to the business world provokes the same question, "Does this mean the end of the independent agent?"

Despite this question being asked for years, each apparent "end of the road" scenario has only served to strengthen the independent agency system. In fact, there are approximately 40,000 IAs nationwide, and they secured 63% of the P&C insurance written in the U.S. in 2022. So, will AI be any different? Let’s delve into what we’re hearing and some likely outcomes.

Jason Cass, an independent agent and founder of the IndieTech Conference – an event focused on insurance industry innovation, has repeatedly said, "AI is not going to replace insurance agents. Agents who use AI are going to replace agents who don't.”

But what does that mean? It’s not too hard to imagine a world where the entire insurance buying process is AI-driven. An insurance consumer’s information is populated, evaluated, and assessed. Then, coverage options are provided, and the consumer selects an option to purchase. Easy, right? Not so fast.

Even some of the smallest risks have caveats that AI may not be able to assess through the information provided

  • The prospect may not know or understand the risk information they need to provide;
  • As has been repeatedly found (e.g., in the ACA buying process), insurance buyers need support to understand their options.

But that’s not all. There are unique risks that require nuance and individual experience, whether for a specific risk, location, industry, or otherwise. Many agents have developed this knowledge over years of specialization. While AI can gather and analyze mass quantities of data, it is not yet capable of turning generalizations into customized advice. 

Perhaps one day, AI will be able to provide personalized insurance consulting, but that future seems further out. Instead, AI can be used now to work alongside agents, improving workflow and enhancing the client experience. 

“The important thing is that the agents who adapt to emerging technology while continuing to provide value are the ones who will replace those agents who are not willing to adapt,” David Watson, founder of RiskAdvisor, recently told Insurance Business America.

Those are wise words, as “fear” of AI won’t help you if it innovates the industry. Instead, you can ask questions about ways you can adapt within your own agency, including:

  • What are the pain points for our team?
  • What are the things we wish we could do faster?
  • What repetitive tasks could we reduce or eliminate?
  • What areas of innovation would best support our clients?
  • How can we find more opportunities to grow organically? 

As you answer these questions, you may have a list of areas where you’d like to see improvement. Can AI help you do it? The answer likely is – or at least will be – yes. Here are a few examples to illustrate how:

Improving workflow in the hard market

QuoteWell uses AI in their process of placing risks in the wholesale market. Their utilization helps with submission clearing, extracting data from applications, and making appetite-based recommendations. They combine this technology with their team of experienced brokers and 60+ carrier relationships to help you move from submission to quote with ease.

Supporting your current clients

ReFocus AI utilizes “plug-in” machine learning to your agency management system to pinpoint policyholders likely to leave up to six months before the renewal date, with a +90% accuracy rate. This allows you to have conversations and develop outreach to better service current clients and better adapt to the needs of those considering shopping their policies or not renewing. 

More opportunities for growth

LeO was developed to equip sales professionals, agents, and brokers with the tools they need to accurately identify and understand prospects before initiating contact. Their platform uses AI to identify and align with each user's expertise, actively surfacing relevant and opportune leads to bolster their business portfolio.

As you can see, there are an abundance of ways AI can support your agency’s work. If you’re an independent agent who wants to take the question of “being replaced” off the table, then use technology to continue to enhance your value and make you even more irreplaceable. 

Sources

https://www.propertycasualty360.com/2023/08/09/independent-agents-saw-largest-growth-in-homeowners-lines-in-2022/ 

https://www.insurancebusinessmag.com/us/news/technology/agents-who-use-ai-are-going-to-replace-agents-who-dont-493012.aspx

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