Navigating Change: How AI Is Reshaping the Landscape for Insurance Agents

Artificial Intelligence (AI) is becoming one of the largest topics of conversation in the insurance industry, primarily due to its potential impact on traditional processes and customer experiences. Although AI has been in research since the 1950’s, large tech companies like OpenAI, Microsoft, Google and Facebook have recently advanced the math, science, and programming behind it making it much more usable to modern people. These advancements are moving so fast, AI now has the ability to pass the bar exam in the 90th percentile and It even helped Google’s research lab, DeepMind, discover millions of new crystals which would have equated to nearly 800 years’ worth of human research efforts. Now, a lot of insurance agents are asking themselves whether AI is going to take their job, or worse, is AI going to take over humanity!?

The short answer is no, it won’t take your job as an insurance agent (or take over humanity); but it will change your job and the insurance landscape over time. Before I get into the whys and how’s of the change AI will drive, it’s important to remember that the demise of insurance agents has been preached by many uneducated of the industry or by those who would profit from it since the days we were all still logging into AOL over dial-up … When I first started my InsurTech company XILO, built for insurance agents to help them fight back against technological disruptors, big direct writers like Lemonade and Next Insurance prophesied that insurance agents would be obsolete by now. They then later rolled that statement back and started working with independent agents a few years later. Lemonade is now seemingly working on “synthetic agents” to try and generate a profit but still admit to the power of independent agents in their announcement of these terminators and may have trouble convincing consumers, who are very uncomfortable with the idea of AI Insurance Agents, to buy through a synthetic agent.

As someone who’s been in software programming for a decade and AI/Machine Learning for the last few years, I want to assure you that AI is not the next terminator and that agents are needed for AI to help improve the insurance industry. The changes that will affect an insurance agent’s job will vary from one product line (personal lines) to another (life and health). But there are a lot of commonalities that will change for all insurance agents. For the sake of keeping this article to a readable length, I’m going to list some of the broad changes you will see as an insurance agent.

Insurance agents will have to field new objections and questions as customers become more informed on their risk

As AI advances on modern consumer apps like ChatGPT, the customer’s ability to research their risk before talking to an agent increases significantly. Studies have already shown that over the last 10 years a majority of insurance shoppers start their journeys through online research and I expect that will trend upwards while they also become more informed on their risk given the ability to Q&A with an AI chatbot. Companies like Perplexity.ai, who recently raised about $74m from the likes of Jeff Bezos, are making it easier for consumers to not only ask AI questions, but to reference credible sources to increase the quality of the answers provided. If you’re selling personal lines insurance, be prepared for consumers to try and prescribe themselves the coverages they need with an estimated price range, similar to what doctors faced when WebMD became popular. If you’re in commercial insurance, be prepared for a more sophisticated and educated buyer. Agents will need to start handling new types of objections or Q&A driven by this change. They’ll also need to fact check their customers given the misinformation that can be provided by AI chatbots in the short-term as companies like OpenAI figure out how to increase the validity of the responses of their chatbots.

Insurance agents will get new features to automate workflows but will have to learn the nuances of these new systems

With venture capital (VC) investment in AI increasing, BrokerTech/InsurTech companies like mine will also start heavily investing in AI in order to stay at the forefront of the software market. Top tier VC firms are telling me about their excitement in technology that leverages AI to automate insurance agent workflows, making it a big focus for the next few years. This means insurance agents will be getting features and services that will make their lives significantly easier. In my blog, I’ve already written about a few use cases that could save agents a lot of time, including:

1. AI can synthesize client documents to help with discovery and E&O
2. AI can extract data from policy dec pages and Acord form to help automate data entry
3. AI can extract data from phone calls to help automate data entry

These are just a few examples, but there are many more including:

1. AI can help detect fraud based on client profiles
2. AI can help score and prioritize clients based on their profiles
3. AI can identify additional opportunities to help round out accounts by scanning your book of business
4. AI can help service customers by answering questions that don’t require an agent
5. AI can help you with email and digital marketing by writing creative content

Fortunately, and unfortunately, these new features are going to come at a rapid pace given the nature of tech startups and our competitive landscape. That means management will be implementing new features and platforms that you will have to learn that may disrupt how you currently operate. We know first-hand, some of those will stick, and some of those will phase out quickly. My recommendation is to double down on the ones that truly drive efficiency in your process and that remove steps, as this will help with the next change that I’m suggesting.

Insurance agents will be expected to adopt technology faster than their competitors

We’ve seen it first-hand; some agencies adopt technology easily and improve workflows continually so they can deliver a better customer experience. Other’s struggle to adopt new technology for various reasons. I know it’s challenging, especially for those that have been conducting business the same way for decades. But one thing is certain with the advancement of AI, your competitors will be driving technology changes that will improve their customer experiences and competitive advantages. Commercial insurance agents will start using features like I mentioned above so that they can quickly read through summaries of all interactions and documents stored on a client to seem highly informed on a customer prior to going into a renewal conversation making it a much more personalized experience for them. Personal insurance agents will start running analysis on their books of business to identify new cross-sell opportunities driving up retention on those clients. Life and health agents will start using AI bots to synthesize carrier PDFs to help better inform customers on their coverages and policies. These things have already started happening and will only improve over time. As an insurance agent, it will become your duty to adopt new AI technology to better service your customers.

New risks will require insurance and old risks will change

One of the easiest examples to point to when talking about how AI will change the risk we’re insuring is to take a look at the autonomous driving industry. Autonomous vehicles are programmed with AI that can make the vehicles capable of driving themselves. Some studies have shown that autonomous vehicles are already 50% as safe as humans and are expected to pass them in the future. But there’s also plenty of bad publicity out there where autonomous vehicles have put people in danger. One thing’s for sure, we know as these things improve, more services will come out to robotaxi people to and from work and more cars will come out with autonomous capabilities. This will have a huge impact on personal auto risk. Another big personal risk coming is from a category of AI called “DeepFake”. DeepFake AI technology enables someone to create videos and audio that is identical to virtually anyone given existing video or audio of that person. In some cases, I’ve seen professors able to create videos using AI of themselves speaking that appears 100% real from just a few minutes of recorded video to train the AI on. This presents a whole new risk category for insurers that agents will need to learn the nuances of as it could also increase fraud significantly.

These are just a few examples of how the job of an insurance agent will change due to advancements in AI but the list could go on. AI at its core is a scientific concept that requires a lot of research to advance. This means we don’t fully understand its potential which has many overestimating it (terminator) and many underestimating it (it’s a fad). My recommendation is to stay right in the middle. Stay educated on what’s new by following journals that write about how the insurance industry is using AI or what new risks are on the horizon. Ask your carriers what they’re doing in AI and how it will affect you so you can be ahead of the game and not behind it. Try not to overwhelm yourself with all the new features and platforms coming out as a lot of it will be a waste of your time, but do not reject AI altogether as your competitors will be using it to drive a better customer experience.

In closing, as the insurance landscape evolves with AI’s integration, remember that it’s not about fearing the change but embracing it. By staying informed, adaptable, and open to the myriad of ways AI can enhance your capabilities as an agent, you’ll not only future-proof your career but also provide unparalleled value to your clients. AI won’t replace you; it will empower you to be more efficient, knowledgeable, and competitive in a quickly transforming industry.