Is AI a blessing or burden?
[T]he most ardent, relationship-driven agencies are recognizing the need to embrace new tools that will
improve efficiency, productivity and profitability and ensure that they stay relevant.
By Cheryl Koch, CPCU, ARM, AAI, ACSR, AFIS, and Mary Belka, CPCU, ARM, ARe, RPLU, CIC
Independent insurance agencies have always prided themselves on their ability to make connections and build relationships, understand the needs of and participate in their local communities, and arrange customized insurance programs for their clients that help them achieve their financial goals. Yet in today’s fast-paced business environment, even the most ardent, relationship-driven agencies are recognizing the need to embrace new tools that will improve efficiency, productivity and profitability and ensure that they stay relevant. At the center of this evolution stands artificial intelligence (AI), which may represent the most exciting yet scary technology ever to enter our workplaces.
AI is no longer science fiction or the sole domain of Silicon Valley companies. Its use has permeated everything from your email inbox, filtering for spam, to those clever voice-activated devices that seem to be able to read your mind and select your favorite music. For independent insurance agencies, AI offers the promise of sharper insights, streamlined workflows, enhanced customer experiences, and new opportunities to compete in a data-driven marketplace. But with these benefits also come questions about trust, transparency, and maintaining the human touch that has always defined the independent agent’s value proposition.
How AI has entered the independent agency world
Unlike some transformative technologies of the past, AI did not arrive in the form of a single product. Instead, it is seeping into dozens of platforms and processes that agencies already touch, such as:
Agency management systems (AMS). Technology providers are integrating AI into their systems to be used for automated data entry and other repetitive tasks.
Customer relationship management (CRM). AI is helping producers identify and track prospect engagement, generate leads, and provide timely follow-up.
Email and communications. AI can generate personalized responses that have the appropriate “tone,” draft client marketing campaigns, and keep the agency active on social media.
Company usage. Underwriters are using AI to assess submissions, which in turn influences how agencies prepare applications and what information is required.
Marketing. Chatbots, content generators, and website analytics powered by AI allow small agencies to deliver digital experiences that once were the domain of only the largest organizations with huge marketing budgets.
The point is simple: AI is not a product for agencies to buy and add to their “tech stack.” Rather, it is creeping into the core tools upon which they already rely—and those that ignore the trend risk falling behind in technology adaptation once again.
Enhancing efficiency and reducing administrative burdens
Many fear that AI, once fed all the human knowledge available, will be a replacement for people. On the contrary, AI won’t be a replacement; it will serve as an enhancement. Tasks that are currently “manually automated” will support the efforts of producers and account managers by speeding up the rate at which some work can be performed, such as completing applications and checking contract language, leaving more time for engagement and interaction with agency clients.
If anyone is feeling threatened by the expanded use of AI, it should be only those individuals who do not really add value to a transaction but add to its cost. Professional insurance agents will be more focused and effective than ever before because certain administrative tasks are being handled in the background by technology.
Think of some time-consuming tasks, such as completing a new business or renewal submission and sending it to various insurers, or analyzing loss runs to determine trends in order to make solid risk management suggestions, or reading a lengthy construction contract to determine the insurance requirements. AI, even in its current state, can perform all those tasks in a fraction of the time it currently takes.
AI can be used to gather necessary information from public databases, analyze that information and populate forms that facilitate communication between agents and their carrier partners or clients. Much like the anti-plagiarism software used by teachers for decades, AI can compare coverage forms and detect differences, leaving final decisions as to suitability to insurance professionals to present to their prospects and clients.
Combined with strong human relationships, these tools will allow agencies to provide both modern convenience and personal expertise.
Data-driven decision-making
A challenge for many agencies is that they sit on mountains of valuable data (e.g., policy histories, loss runs, client demographics), but lack the tools or time to make sense of it. AI is turning this data into actionable intelligence, finally delivering what many technology firms have promised for years.
By analyzing patterns, AI can:
- Show which industries, accounts or lines of business written by the agency are most profitable
- Suggest which carriers are most likely to provide competitive quotes based on an analysis of past activity
- Identify inefficiencies in agency operations, scan for adherence to agency procedures and identify potential errors and omissions problems
This kind of insight arms agency leaders to make better strategic decisions, whether about account placement, carrier relationships, or internal operations.
Challenges and concerns
While the benefits of AI are significant, they come with real challenges that agencies must consider carefully before applying the technology.
Accuracy and oversight. AI can sometimes produce inaccurate information or “hallucinate” results. Agencies must remain vigilant about human oversight to avoid errors.
Data privacy. Using client data with AI requires strict adherence to privacy rules and cybersecurity best practices.
Cost and integration. Not all AI tools integrate smoothly with existing agency management system platforms, and some may require upfront investments that smaller agencies could struggle to afford.
Cultural resistance. Current staff who have worked for decades in insurance may be hesitant to trust AI recommendations or to change and adapt workflows.
These potential hurdles can be overcome, but they require thoughtful and intentional leadership to address any concerns.
Practical steps for agencies considering AI
For agency leaders interested in AI but unsure where to start, consider the following roadmap:
Audit current pain points. Where are staff members spending the bulk of their time? Certificates, remarketing, contract review, or policy analysis? Focus AI investment there first.
Leverage existing tools. Many AMS and CRM providers are adding AI capabilities. Agencies may already have access—they just need to activate or train staff on the features.
Train your team. Emphasize that AI is there to support staff, not replace them. Offer training to build confidence and show quick wins in the form of time saving.
Maintain human oversight. Always pair automation with accountability. A client should never receive a message that hasn’t been reviewed for tone and accuracy.
Communicate with clients. Be transparent about how AI is being used in the agency—especially in sensitive matters like data analysis—to maintain trust.
Balancing high-tech with high-touch
The biggest fear among many independent agents is that AI will erode the personal service that defines their value. In fact, the opposite can be true—if agencies are intentional. By automating routine tasks and streamlining processes, AI gives agency staff more time for meaningful conversations, deeper client education, and proactive risk advising.
Think of it this way: The independent agency channel has always thrived on relationships, expertise, and trust. AI doesn’t replace those—it amplifies them by handling the background work that often distracts producers and account managers from client interactions.
The independent agency model is built on local ties, personal counsel, and advocacy during difficult times. Artificial intelligence does not change that—it only strengthens it.
The authors
Cheryl Koch is the owner of Agency Management Resource Group, a California firm providing training, education and consulting to producers, account managers and owners of independent agencies. She has a BA in Economics from UCLA and an MBA from Sacramento State University. She has also earned several insurance professional designations: CPCU, CIC, ARM, AAI, AAI-M, API, AIS, AAM, AIM, ARP, AINS, ACSR, AFIS, and MLIS.
Mary M. Belka is owner and CEO of Eisenhart Consulting Group, Inc., providing management and operations consulting to the insurance industry. She also is an endorsed agency E&O auditor for Swiss Re/Westport. A graduate of the University of Nebraska, Mary holds the CPCU, ARM, ARe, RPLU, CIC, and CPIW designations.
