Artificial Intelligence
Beyond the hype: Practical AI strategies for independent insurance agencies
The right AI tools can give independent agencies a real advantage. The key is to focus on practical value, adopt strategically and manage the risks that come with rapid change.
Key Takeaways
- AI adoption should be strategic rather than driven by pressure to move quickly.
- Agencies should choose tools based on their needs, including general-use and specialized AI solutions.
- Practical AI applications include customer service, marketing, administration and business planning.
- Clear policies, training, oversight and careful tool selection are essential for managing AI-related risks.
Introduction
The rapid pace of AI adoption has divided independent insurance agencies. Some view the AI trend as little more than hype and prefer a wait-and-see approach. Others are eager to embrace AI in all its forms and move quickly to avoid being left behind.
Reality lies somewhere in between. There is a lot of hype around AI, and some applications probably will not live up to expectations. At the same time, the right AI tools can deliver a real advantage, and ignoring the technology entirely could leave agencies at a competitive disadvantage.
The trick is to focus on the AI solutions that provide real value while minimizing the risks.
Strategy Matters More Than Speed
According to the ACT Tech Trends 2026 report, 68% of agencies plan to increase their use of AI in the next 12 months. However, 56% have no written AI policy or guidance, and only about 8% are using AI regularly and strategically.
Many agency leaders feel pressure to adopt AI tools. But moving forward without a strategy will not necessarily provide the results agency leaders need. The agencies that benefit the most from AI will not necessarily be the earliest adopters; they will be the ones that implement it wisely. The goal should not be to adopt AI quickly, but to adopt it strategically.
Developing Your Practical AI Strategy
Every agency is different, and your AI strategy should reflect your unique needs and goals. To develop a strategy that works for you, focus on three critical questions.
1. Which AI tools do you want to use?
AI, or artificial intelligence, is an umbrella term encompassing technologies that perform tasks typically associated with human intelligence, such as analyzing information, recognizing patterns, generating content and making predictions. Generative AI is one type of AI that can produce new content, including text, code, images, video and audio. Agentic AI is another type of AI that can carry out multi-step tasks.
There are also general-use AI tools and specialized AI tools.
- General-use AI tools include familiar programs like ChatGPT and Claude. Many of these tools offer free or inexpensive subscriptions and can be used for a wide range of purposes across multiple industries and even personal applications.
- Specialized AI tools are designed to fulfill a specific function or serve a specific industry. These tools offer features tailored to workflows, data handling and compliance requirements, which may make them valuable for agencies.
2. What do you want AI to handle?
As you review the AI tools available to you, it is important to think about what you want to accomplish. AI can handle a wide range of tasks, and different tools will be better suited for different purposes.
For insurance agencies, some of the most practical applications involve:
- Customer service. You can use AI to provide after-hours, overflow and multilingual support via phone, email or text. AI agents are even capable of assisting with more complex tasks, such as after-hours quote intake and certificate of insurance processing.
- Marketing. Generative AI tools can produce text and images to support your email, blogging and social media campaigns. You can use AI to brainstorm marketing ideas, generate drafts or edit materials you have created.
- Administration. AI can be particularly useful for tasks involving data and documentation, including extracting data from PDFs and ACORD forms and populating applications. Used this way, AI can reduce data entry and speed up processes that used to be time-consuming.
- Business planning. You can use AI to brainstorm growth strategies and create detailed business plans. You can also use AI to help train employees and track their performance.
A practical way to evaluate AI
Start with the business outcome you want to improve, then choose the AI tool that best fits that task, your workflows and your compliance requirements.
3. How will you manage AI risk?
Change always involves risk, and AI represents a major change. AI has the potential to:
| AI Risk | What It Could Mean | How to Minimize the Risk |
|---|---|---|
| Sensitive Data Exposure | Confidential client or agency information could create privacy and security risks if an AI provider does not store, use or protect it appropriately. | Vet AI tools carefully and be mindful of what client and agency data you share with them. |
| Client Backlash | Obviously AI-generated material or difficulty reaching a real person could create a negative customer experience. | Use AI for behind-the-scenes support that frees up more time for genuine human interactions. |
| Inaccurate Outputs | AI tools can fabricate information, make mistakes or produce results that conflict with company policies. | Choose platforms carefully, establish strong guardrails and monitor AI outputs for accuracy. |
| Employee Division | Some employees may resist AI, while others may adopt unauthorized tools without considering security or compliance requirements. | Create clear AI policies, provide guidance and work to get your entire team aligned. |
| Copyright Concerns | AI-generated content could improperly use copyrighted work, and AI-generated materials may not always receive copyright protection. | Review AI-generated content for improper use of others' work and maintain meaningful human involvement in content creation. |
| Insurance Gaps | Policy exclusions or limitations could potentially leave certain AI-related claims uncovered. | Review applicable policies and discuss potential AI exposures as your agency's use of the technology expands. |
Thoughtful Adoption Creates the Advantage
These risks do not mean agencies should avoid AI; there is also risk in failing to take action. However, they do mean agencies need to be mindful of the potential pitfalls and take steps to manage them. Successful AI adoption requires clear governance, including policies, training and oversight.
The insurance industry is still adjusting to rapid AI adoption. Agencies that take a thoughtful, strategic approach to AI adoption will be in the best position to improve efficiency, enhance customer service and compete in an evolving marketplace.
Make AI Strategy the Priority
The agencies that stand to benefit most from AI are not necessarily the fastest adopters. They are the ones that choose useful tools, apply them to the right problems and put strong governance around their use.
Build a Practical AI Strategy for Your Agency
Explore practical ways to evaluate AI tools, identify the right opportunities for your agency and manage the risks that come with adoption.
Get the AI Strategy Guide