Despite the rapid advancement of artificial intelligence (AI) in the insurance industry, only 6% of agency principals have implemented an AI solution, with many expressing concerns about its impact on their agency’s operations, according to the 2024 Agent-Customer Connection Study by Liberty Mutual and Safeco Insurance.

The study — which surveyed more than 1,000 independent agency leaders, agency staff members, and consumers — reveals a complex relationship between AI and the insurance sector, indicating a need for effective strategies to harness AI’s potential and address prevalent concerns about AI accuracy and data privacy.

Low current adoption but growing interest

So far, AI tools remain on the fringes in most independent agencies, according to the report. While only 6% of agency principals surveyed said they have already implemented an AI solution in their agency, more than one-in-three (36%) said they are likely to be using AI in their business in the next five years.

The research found that agent sentiment on AI is split. Sixty-four percent of agency principals said they are interested in how AI can improve their business, but only 17% of agents said they trust AI technology, and 27% view AI as a threat.

“I’m still learning a lot about the impact that AI will have,” said one of the agents surveyed, “but from what I’ve learned so far, it could revolutionize the way we service clients and bring many new efficiencies to our service platform.”

For many agents, a lack of understanding about AI is holding back adoption. Forty-five percent of the agents surveyed said they don’t know enough about AI to make business decisions about the technology.

Concerns about AI accuracy and data privacy are also prevalent. Nearly one in three agents say they are unlikely to implement AI into their business practices in the next five years, citing a lack of trust and concerns about data privacy as the top reasons.

Potential Benefits of AI for Insurance Agencies

AI technology has the potential to drive significant efficiency gains and time savings for insurance agencies, the Liberty Mutual/Safeco report’s authors stated. AI-powered chatbots alone could save businesses up to 30% in customer support costs. The report cited a recent survey by Section, which found that among professionals who are adept at working with AI, they reported saving up to 12 hours per week by leveraging the technology.

Half of agency principals said they believe AI can make their business more efficient, and 43% of agency principals surveyed said using AI will help their agency better serve customers and grow the business in the future.

The top five areas where agents envision AI providing a boost include:

• Identifying cross-selling opportunities, cited by 58%
• Assisting with marketing content creation, 53%.
• Automating routine service tasks, 52%.
• Creating personalized customer communications, 46%.
• Automating administrative tasks, 44%.

The efficiency and service enhancements enabled by AI will be key to meeting the rising expectations of insurance customers in the digital age, according to the report. Seventy-seven percent of independent agency customers said it’s very valuable or critical for their agent to be highly responsive to requests, and 67% want their agent to proactively understand their needs. The ability to contact an agent 24/7, something AI can help facilitate, would make 39% of customers more likely to choose a particular agent over another.

View the complete Liberty Mutual/Safeco survey report here.