We've written quite a bit over the past yearabout direct writers and how insurers are not necessarily lookingto get rid of the middle man in the insurance deal, but are seekingalternate ways to deliver products and communicate with theircustomers, the policyholders that purchase their products.

While much of this discussion has centered on personal linesproducts, Deloitte got some people thinking differently when theyissued a report that discussed what the consultant believes willone day become a trend in the insurance industry—direct writers forsmall commercial lines products.

Such talk often brings out the doomsayers that have beenpredicting the demise of independent agencies for years, but thatis really far from reality. There is no doubt that agencies facechallenges to their very existence, but no matter how much someconsumers think they know it all, one simple insurance mistake canbe costly for consumers in the long run.

In short, people need independent agents to help them understandthat what may seem obvious is not always that way.

I recently asked some research groups if they had any numbers onwhat insurance carriers might be spending this year on agencytechnology and the distribution of their policies.

Deb Smallwood, founder of Strategy Meets Action, reports thatease-of-business technology investments remain a high priority forcarriers and that insurers expect to spend 10 percent of their ITbudget on distribution this year. She adds that nearly 40 percentof insurers expect that number to increase in 2014.

Novarica's managing director, Matt Josefowicz, explains that hiscompany doesn't have specific numbers for distribution expenses,but he agreed with Smallwood's estimate that it could reach as highas 10 percent of IT spending.

Mike Fitzgerald, a senior analyst for Celent, pointed to thenumber of software deals involving distribution technology as anexcellent sign that spending on connectivity with agencies is onthe rise. Celent reports that distribution ranks behind coreprocessing and infrastructure spending, but over 20 percent ofsoftware deals in each quarter of 2012 involved distribution.

These aren't definitive numbers by any means, but they areindicators that agency technology remains a vital part of aninsurer's plan to attract and retain business and that should becomforting to agencies—at least for a while. For more on this,check out our Special Report on carrier/agency connectivity.