Why small businesses trust AI advice but still want agents

Small-business owners value using AI tools to research insurance rates, even more than they trust agents, according to an ERGO NEXT survey. 

Thirty-six percent of entrepreneurs have used an AI chatbot or search tool to look up options related to business insurance, compared to 31% who ask an agent. Ninety-four percent of those who have used AI for business insurance advice say they trust the information they receive from the tool, according to the survey. 

"AI is lowering the barrier to understanding insurance and is giving insurance buyers a way to educate themselves on their protection needs," Effi Fuks-Leichtag, chief product officer at ERGO NEXT, shared with Digital Insurance. "To me, this signals a more informed buyer who wants to better understand their risks and coverage options before making a decision."

Thirty-one percent of respondents say they trust the AI tools more than other sources, while 63% say they trust them about the same as other resources and only 7% of respondents said they trust AI less.

"For agents, this brings about another evolution of their role. As SMBs come into conversations with a stronger baseline knowledge, agents have the opportunity to spend less time on the basics and more time offering expertise on complex insurance decisions," Fuks-Leichtag shared. "That means their expertise and ability to build trusted relationships with clients is more important than ever." 

Small businesses founded in the past year are also more likely to have insurance than companies that have been operating longer. But many struggle to determine what coverage is needed. Twenty-five percent of small businesses don't have insurance and 64% with coverage are underinsured. Fifty percent without insurance say it's too expensive and 20% say it's too confusing. 

The survey included responses from 501 U.S. small business owners, founders and sole proprietors including 250 entrepreneurs in their first year of business. It was conducted between April 29 to May 12.