AI is changing the independent insurance channel right before our eyes. It's happening so fast and so drastically that it can be hard to see where the end point is.
According to Vertafore's Chief Product Officer James Thom, AI provides a technological leap that results in more capacity for agents, which will fundamentally change agency work. Here are three ways AI is transforming agency operations.
Agents are moving from reactive to proactive
End-insureds often feel like they're the ones leading their relationships with agents. Roughly 4 of 5 policyholders say they do not receive proactive outreach from their insurance agents. When agents are reacting, they're not as likely to gain trust and show their clients they're looking out for them.
In the status quo, agency staff spend much of their time going through inquiries, entering data, routing work throughout the agency, and chasing down information. All of these tasks require manual work that creates friction in how agents interact with clients, underwriters, and carriers. AI is giving agents more agency by:
- Filtering and distilling communications
- Giving fast answers to complicated questions
- Processing data
- Automatically routing tasks and streamlining workflows.
As a result, agents can be more proactive in sharing information about risk management, getting ahead of renewals, or earning business from prospects. When agents are more proactive in renewal conversations, client outreach, claims support, prospect engagement, and relationship building, clients feel more connected and agencies might see higher renewal rates or more referrals.
"We all love checking off items on a to-do list, but wouldn't you rather be out there helping people get the right coverage, helping people through their claims process, helping people understand what insurance they need?" Thom said. "All those things are so much more satisfying to people and really what this industry is founded on."
AI is a tailwind for growth
A common sentiment around AI—across industries— is that it will replace workers. Instead, we should think about how AI will replace certain types of work.
Reconciliation, for example, takes long, late hours at many agencies. AI that can ingest and match information that previously required manual effort can reduce the time spent on that process by 90%. The human judgment is still needed to handle exceptions, but the hours spent on the process can instead be used for strategic or client-facing tasks.
Think of an agent’s day as a pie chart: AI is making it so administrative work fits into a slimmer slice. Staff are assisting clients, selling policies, and handling claims—all tasks to help grow the business—while AI makes operations smoother.
"The idea of the human in the loop, the personalized advice, the care that our customers provide to their clients, it doesn't go away," Thom said. "AI can't replace a lot of those things."
ROI is more than financial
AI is being applied across nearly every part of the insurance workflow, and agencies have more tech choices than ever. That wealth of choices also makes it important to be deliberate about where to invest and how to measure ROI.
The strongest AI opportunities come from existing workflows, especially where repetitive, manual work consumes significant employee time. In those areas, AI can reduce effort without forcing agencies to rethink the way work already moves through the business.
Thom said AI should feel native to the way agencies work today. A useful test is whether the technology makes the full workflow simpler: fewer manual steps, less movement between systems, and more capacity for higher-value work.
However, ease of work might not have a direct line to the bottom line. Measuring ROI goes beyond the revenue impact. Consider:
- Capacity created: Hours returned to employees when manual or repetitive work takes less time.
- Workflow efficiency: Fewer manual steps, handoffs, duplicate entries, or follow-ups required to complete routine work.
- Employee experience: Less time spent on administrative drudgery and more time on work that uses judgment, expertise, and client interaction.
AI is changing the proportion of agency work that requires human time. The opportunity for agencies comes from what their people can do with the capacity that creates.
Hear more from James Thom about AI, the future of insurance distribution, and what these changes mean for independent agencies by listening to his full conversation on Insurance Journal’s On Point podcast.