Three ways AI is reshaping independent insurance agencies

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 James Thom, Vertafore’s Chief AI Officer, artificial intelligence 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.

Roughly 4 of 5 policyholders say they do not receive proactive outreach from their insurance agents. And proactive communication is key to for agents to gain trust and show their clients they’re looking out for them.

Insurance professionals report spending much of their time going through inquiries, entering data, routing work throughout the agency, and chasing down information. Today, these tasks are often highly manual, eating up hours that agents could use to interact with clients and underwriters.

AI is able to take on that manual burden and free agents by:

• Filtering and distilling communications
• Delivering fast answers to complicated questions
• Rapidly processing data to surface meaningful insights
• 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 are likely to see higher renewal rates and 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.”

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A common fear about AI across industries is that it will replace workers. However, the value of humans in insurance isn’t changing. Instead, it’s more useful to think about how AI will replace certain types of insurance work.

“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.”

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.

Direct bill 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 up to 90%. Human judgment is still needed to check what AI produces and to handle exceptions. But the hours spent comparing spreadsheets and searching for discrepancies? That’s the kind of busy work AI can handle—and handle well—while giving humans more time to focus on activities that grow the business.

AI is being applied across nearly every insurance workflow, and new solutions and tools are cropping up daily. That wealth of choices makes it important for agencies to be deliberate about where to invest and how to measure the outcomes of that investment.

According to Thom, 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.

The strongest opportunities for AI to make a real impact are within existing workflows, especially where repetitive, manual work consumes significant human time. AI can streamline effort without forcing agencies to rethink the way work already moves through the business.

Simplifying and accelerating workflows might have a direct line to the bottom line. For example, if an agency doesn’t need to outsource manual data entry of benefit plans, the cost savings are clear. However, agencies should look beyond cost-cutting when evaluating the benefits of AI. Key questions to ask:

• Can AI create capacity for my agency? It’s no surprise AI can return hours to employees. But it can also make it easier to process more quotes, place more business, and identify new markets and risks. That capacity has a direct line to agency growth.
• Can AI help make my data cleaner? Insurance runs on data, and AI is exceptionally good at data entry—without the typos and quirks humans bring to the task. Cleaner data makes it easier for systems to talk to each other and to surface the trends and insights agencies need to find their next opportunities.
• Will this make my work life better? No one grows up wanting to spend every day pushing paper and rekeying data into multiple systems. AI can take on the administrative burden so people can spend more time on work that uses their judgment and expertise.

Hear more from James Thom about AI tools, the future of insurance distribution, and what these changes mean for independent agencies during his conversation with Peter van Aartrijk on the On Point podcast.