Artificial intelligence (AI) can be a powerful tool for insurance agencies. (Image credit: svetazi/Adobe Stock)
It's no secret that insurance premiums across all P&C lines are on the rise. In the past year, nearly half of homeowners insurance customers in the U.S. saw a rate spike, according to J.D. Power. And car insurance premiums have increased sharply and consistently since 2022, the Bureau of Labor Statistics (BLS) reports.
In light of these skyrocketing rates, more consumers are shopping around to compare quotes and find the most affordable policies. Many are also turning to independent insurance agents who can offer more choices and ultimately, better outcomes.
Unlike captive agents — who sell a single insurance product — independent agents can compare offerings from multiple carriers to help insurance shoppers pinpoint the best fit for their needs.
As consumer demands change in this evolving insurance landscape, independent agents are poised to offer increasingly more value to consumers and drive further growth in the space.
Insurance shoppers want options.
I've been helping clients navigate the insurance space for more than 30 years. Despite countless changes during that time, one thing has remained true: Consumers want options. This is an area where independent agents have a huge advantage.
Here's an analogy: A restaurant that only serves one item probably won't be very successful over the long term. They might appeal to a few diners, but they're going to miss out on a big group of customers who want to eat something else.
Just like a restaurant that only serves one item, an insurance agency that's limited to a single-carrier model just doesn't work for everyone. Agents who partner with many different insurance companies will draw more shoppers, which can in turn improve their bottom line.
Working with multiple insurance carriers empowers agents to take care of many clients' insurance needs, not just a select one or two.
Customer satisfaction over cost
Today's insurance industry is dominated by technology, but many consumers still want to speak to a human being about their insurance needs. Independent agents can build trust and lasting relationships with clients. Success comes from prioritizing personal relationships over transactions.
Insurance can be confusing, which is why agents should be available to clients who have questions or need help. Ensure that people are adequately covered, understand their policies, and walk away feeling confident about their choices.
While agents are here to help as many people as possible, we're also not afraid to turn customers down when there's not a good fit. This strategy can be immensely helpful to an agency. If we can't help a customer right now, we might be able to help them in the future with something else, but only if we provide a good experience.
The bottom line is this: Friendliness and a positive attitude can go a long way in the insurance business. More importantly, it can help an independent agent stand out in an increasingly crowded marketplace. For a lot of shoppers, they're not worried about pricing; they're worried about being heard.
Use AI to improve efficiency, not replace live support.
Artificial intelligence (AI) can be a powerful tool for insurance agencies, but it also can be detrimental. If customers can't reach a live person on the phone because of AI, they might decide to take their business elsewhere.When customers call my office, they are greeted by "Gayle," an AI-powered customer service representative. Gayle can ask questions and collect information, then send that information to an account manager. That way, agents can focus on more complex tasks, like relationship building, and spend less time answering the phone for things like billing issues.
While AI can streamline routine tasks, the nuanced complexities of personal and commercial insurance will always require human expertise. Not only that, but live interactions are what consumers value, despite the industry's increasing reliance on technology. AI is a resource, but it will never replace actual people.
Mike Rice is vice president of Thomas Ward Insurance Group, an independent agency in Chicago, Illinois. With over 30 years of industry experience, he is known for delivering exceptional value, responsive service, and thoughtful coverage solutions for clients.
Opinions expressed here are the author's own. This article is published with permission and may not be reproduced.
(Image credit: svetazi/Adobe Stock)
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