AI in Insurance: A Game-Changer or a Threat to Agents?

By

Technology Investments & Insurance Distribution Changes 

Technology and AI are reshaping insurance distribution, bringing challenges and efficiencies. Insurers are investing in digital tools and training programs to balance profitability with customer and agent satisfaction. 

Innovative policy management systems and CRM platforms streamline processes, reducing administrative steps so agents and producers can focus on sales and strengthening client relationships. Additionally, data analytics enhances agent capabilities, creating more cross-selling opportunities and improving customer retention.

IIABA ACT developed an infographic outlining 7 Steps to Better Tech Decisions, tailored to agencies’ specific goals and technological needs to assist agencies in making informed technology decisions. 

However, market challenges persist. Rate hikes, stricter underwriting controls, and limited carrier capacity in certain lines of business have led to frustration among agents and brokers. Despite efforts to modernize, many insurers admit their digital transformation efforts are still average or below average.

AI and Telematics in Insurance 

AI-powered tools have the potential to reduce agents’ workloads, streamline underwriting, and enhance the customer experience. AI-driven customer service can handle routine inquiries and policy updates, allowing agents to focus on higher-value tasks.

Telematics is another rapidly evolving area. Real-time driving data is being used to assess risk and determine premiums. However, agents and brokers must help clients understand telematics, address privacy concerns, and ensure fairness in premium adjustments.

The Role of Agents and Brokers 

Despite technological advancements, agents and brokers remain the primary link between insurers and policyholders. To stay competitive, they must be informed and proactive, understanding how AI, telematics, and real-time pricing impact their ability to serve clients effectively.

The 2025 AI in Insurance Report by Insurity examines consumer perspectives on AI in property and casualty insurance, particularly in the context of severe weather events. Key findings include:

  • 45% of consumers are comfortable with insurers using AI for real-time weather alerts.
  • 42% have concerns about AI’s prediction accuracy and its potential impact on premiums and coverage.

Insurers face the challenge of implementing AI-driven services while ensuring clear, transparent communication about reliability and financial impact. To build trust, insurers must demonstrate the practical benefits of AI-powered alerts and predictions while acknowledging their limitations.

Findings, Opportunities, and Challenges in New Technology 

“Severe weather events are increasing, and consumers are looking for faster, proactive solutions from insurers,” said Chris Lafond, CEO of Insurity. “Consumers want AI-driven weather insights but remain cautious about how these technologies may impact their policies. Insurers have an opportunity to build trust by prioritizing transparency and accuracy while demonstrating AI’s proactive protection without unnecessary costs.” 

The report highlights AI’s potential to enhance the customer experience by offering real-time alerts and proactive monitoring. These tools could strengthen customer relationships and reduce claims costs by enabling early action. However, insurers must ensure that AI-driven insights are both accurate and easy for policyholders to understand.

“The 2025 AI in Insurance Report underscores that while AI adoption is growing, consumers still need more education and transparency to fully trust these tools,” Lafond added. “Insurers that address these concerns directly will build stronger policyholder relationships and maintain a competitive edge.” 

Looking Ahead: What This Means for Agents and Brokers 

The insurance landscape is evolving rapidly, and agents and brokers must stay ahead of these changes. This means more than just adapting to new underwriting rules—it requires a deep understanding of how technology, AI, telematics, and real-time pricing will shape the industry’s future.

By embracing digital transformation while maintaining a personal, advisory role, agents can continue to provide high-value service and differentiate themselves in an increasingly automated market.

Cited Resources 

About the Author:

Jeannine Giesler, CISR, CPIA, and past President of the OIA Board of Directors, Foundation for the Advancement of Insurance Professionals, currently serves as Resource Center Advisor for the OIA. The purpose of the Resource Center is to contribute to building a comprehensive library of resource materials for our members. We pride ourselves on being the one-stop shop for all OIA members and work to solve every problem or situation you may come across.

BLOG ARCHIVE
Tags
advocacy agency merger agency nation agency ownership agency valuation agent story awards blog claims commercial insurance content marketing coronavirus coverages COVID-19 customer experience cyber insurance cyber threat data data breach digital marketing E&O e&o coverage election errors and omissions hiring & training IACON17 Independent Agent insurance insurance companies insurtech legislation marketing mission matters next-gen ohio supreme court oia perpetuation personal lines professional development recruiting risk management social media technology valuation wahve

Success Starts Here

Sign up for our newsletter today!

This is an OIA member benefit, please log in to confirm your membership before signing up! Not a member? Contact Andrea Heiss at andrea@ohioinsuranceagents.com!