The changing role of agents in the property and casualty insurance market

Authors: Walt Shepard & Sami Berrada


The COVID-19 pandemic accelerated channel shifts across consumer sectors. As consumers were forced online to meet their everyday needs, digital laggards had to reinvent their online channels. This digital acceleration has been evident even in the property and casualty insurance industry, which has come at the expense of traditional insurance agents interacting with clients via brick-and-mortar agencies. As consumers navigate a new, more digitally focused customer journey, three trends in the market will change the role of agents in the traditional selling model:



Accelerating online, direct-to-consumer sales

  • Geico and Progressive – who have adopted a direct-to-consumer model – captured 92% of premium growth in 2020. Similarly, online DTC platforms Hippo and Lemonade saw the highest YoY growth of any carrier with at least $50 million in quarterly premiums. Simultaneously, smaller commission pools have led to a 33% decrease in insurance agents over the past ten years.
  • The traditional agent model – already under extreme pressure from digital disruption – will continue to diminish without a fundamental reimaging of the role and value proposition of agents in the sale and service of these policies.

Introduction of complex, hyper-personalized products

  • AI, ML, and IoT are enabling carriers and other insuretech ecosystem players to develop hyper-personalized products for consumers that can be targeted and delivered with near-real-time effect.
  • However, hyper-personalization delivered online – which carries the promise of higher premiums for carriers – will also run head long into online price comparison tools that decrease price by giving consumers more perfect information on competitor offers.
  • Hyper-personalized products can also be complex – especially in an age of product bundling. Agents could be crucial in providing expertise and customer-specific advice while leveraging their relationships to convert potential customers.

Humanizing digital channels with agents

  • While digital sales are scaling quickly in this market, only 20% of customers are expected to transact exclusively via online channels by 2024, and many customers indicate they prefer a multi-channel approach. While carriers who digitize agent channels see it as a mitigation strategy, those who successfully enable agents to shift online saw a 20% increase in the number of policies sold by top agents.
  • Agents will continue to remain an important sales channel. As customers shift online, agents will similarly move to meet them in digital spaces and remain a tool for customer conversion. Companies should think about enabling their agents to meet customers online (e.g., using online video conferences, social media, etc.). By pairing these agents with new tools like behavioral analytics, carriers can optimize a multi-channel approach while retaining key assets.


The shift online to DTC sales has changed the traditional agent-led dynamic in the property and casualty insurance market. While there is significant momentum towards DTC, the introduction of complex, hyper-personalized products creates both opportunities and threats for agents in this ecosystem. Just as AI, Machine-Learning and IoT force carriers to re-think traditional definitions of risk, they must shift their perspective of agents as assets to convert potential customers rather than a liability that decreases the bottom line.  Like the recalibration of physical retail doors in the wake of e-commerce, insurance carriers will have to re-think the size and shape of its agent force, including questions around where to locate them and what role they play in the customer journey.


Walter Shepard

Walter Shepard

Principal, Yarmouth

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