AI Maturity in Insurance Agencies: Past, Present, and Future

Artificial Intelligence (AI) has transformed the landscape of insurance agencies (and the world in general) over the past decade, ushering in a new era of efficiency and decision-making capabilities. The journey through AI maturity can be divided into four distinct phases, each representing a significant leap forward in technological advancement.

The important thing to note is that there is no one-size-fits-all way of running a business, and while we all aspire to be as advanced as possible, taking an honest inventory of your current state is the first step toward future success. And as we’ll touch on, the future is not as far out of reach as it once was. 

The Four Phases of AI Maturity

Here is how I classify the maturity of AI technology, with a specific focus on insurance agencies and brokerages. Where do you see your organization? 

Phase 1 - The Analog Era

• What we call it: Analog Automation 
• What it represents: The absence of artificial intelligence; reliance on basic digital technologies to replace analog processes. More bluntly – this is the past. 
• Who is living in this phase: Many organizations over the past 10+ years focused on digitizing traditional workflows. Often agencies that were future-focused in the 80s and 90s, who adopted technologies that were ahead of their time, find themselves stuck here now. 
• Relevant examples: Storing documents digitally, transitioning from physical file cabinets to cloud storage, adopting email over traditional mail/fax. 

Phase 2 - The Present Age

• What we call it: Instant & Actionable Insights 
• What it represents: Introduction of some level of artificial intelligence; connecting disparate systems for real-time insights; cloud-based technology ecosystems; AI doing the thinking for you. 
• Who is living in this phase: Organizations leveraging cloud technology for processing information and gaining quick, informed decisions. Many larger organizations, as well as smaller but more tech-savvy ones, find themselves at the more advanced end of the spectrum. 
• Relevant examples: Real-time data processing, effortless reporting and dashboards that support efficient decision-making. 

Phase 3 - The Next Best Action

• What we call it: Conversational AI 
• What it represents: AI evolving to be more conversational and forward-thinking; predicting repeatable sets of actions; fully informed and accurate decisions. Think of Spotify creating playlists you will love, or autonomous vehicles making safe driving decisions. 
• Who is living in this phase: Larger companies using AI at scale, evident in platforms like Netflix and Amazon. We are barely seeing independent insurance taking advantage of this emerging tech; when we are, think of the companies for which you see commercials on TV. 
• Relevant examples: Predictive actions such as automatic quoting after price increases, intelligent suggestions for business growth, and automatic triggering of claims processing using telematics. 

Phase 4 - The Future Frontier

• What we call it: The Wild West 
• What it represents: AI transcending current capabilities, with a focus on futuristic technologies and applications. 
• Who is living in this phase: Leading companies are investing billions into creating a future beyond our current imagination. We have yet to see this far into the future anywhere in the insurance industry. 
• Relevant examples: Pioneering developments in AI that redefine industries, setting the stage for the next wave of innovations. Your imagination is the limit to what we will see in five to ten years. 

Current Industry Landscape 

Larger-scale insurance carriers are in Phase 3, investing significant resources to shape a future that is still unfolding. These companies are dedicating billions of dollars to push the boundaries of AI capabilities, and they’re leveraging the world’s largest tech companies to push into Phase 4. From personalizing customer engagement to automating fraud detection, all want to lead the pack.

That doesn’t say anything negative about the other side of the industry – independent insurance agencies and brokerages, those on the front lines ensuring the success and future of insurance. While many hate to admit it, the truth is the vast majority fall into Phase 1 or 2, using a human level of intelligence. Until very recently, modern tech was out of reach for all but the largest agencies, forcing smaller agencies to live in the past. Legacy technology, created two to three decades ago, poses a challenge as it is often inflexible and slow to adapt. Extracting and formatting data for practical use remains a time-consuming task, meaning those companies that were future-focused many years ago are now stuck behind.

How to Get Ahead 

There’s good news for any organization that wants to advance to the next phase of AI Maturity. Big Technology has truly democratized the options available to the entire industry. Salesforce is a great example of tech pushing itself toward Phase 4, making all the best of AI available to its users through new technology like Einstein 1. Companies like Veruna pair so well because they bring the concrete needs of the industry to the pinnacle of technology. Where the two meet, magic happens. Such synergies are guiding smaller companies toward a tech-enabled future.

The maturity of AI in insurance agencies reflects a journey from analog automation to a future-centric approach. As technology continues to advance, organizations must position themselves strategically within these phases to thrive in the evolving landscape of AI-driven innovation.

Do you find yourself at an earlier phase of AI maturity? Or perhaps you’re just starting to think about how AI could benefit your company? Let’s get in touch and talk about it!

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