Agents at the center: Why the human touch still wins in insurance

As Mark Twain famously said in reaction to a New York newspaper's premature obituary of him, "Reports of my death are greatly exaggerated." So is the case with independent insurance agents. In the early 1990's several industry magazines and pundits predicted the death of the agent. In fact, in an ironic twist, the independent agent distribution channel has maintained its share, outliving the magazines, pundits and newspapers predicting their demise.

Insurance innovation arrives at a dizzying pace. Many advances improve the efficiency and profitability of insurance carriers. However, such improvements are not enough to reach the summit of rapid profitable growth. The most successful creations generate transformative developments in the policyholder experience. Artificial Intelligence promises to accelerate such transformation, helping us climb to new heights.

Balancing innovation and the human touch

Think about the benefits the most successful innovations have brought customers to date. For instance, policyholders can buy and access their policy information in multiple ways.

Some customers value speed, simplicity and autonomy—the direct channel attempts to deliver exactly that. Others want personal guidance and advocacy, and a choice between carrier options, particularly when decisions are complex or stakes are high. A relationship with someone they know and trust for advice. Agents deliver that.

But the war between distribution channels has created a surprising confluence: agents can benefit from technology and customers can access the technology through agent-distributed products just as well as they can through direct companies. In fact, many agents have marketing and service operations that look very similar to direct carriers. Many have even joined large branded groups as a way to increase traffic the way large direct carriers do with advertising. So what is the difference between channels? The customer receives the benefits of a product with the option to deal with their personal, local agent in only one channel.

You see evidence of this when a customer chooses to work with an independent agent without ever meeting them. They may have selected a carrier the agent presented for a lower price, better carrier claims service, the confidence the rate has been compared with several companies, or even the superior technology offered by one of the carriers an agent represents. If they never interact with the agent, they get the same exact experience they would get with a direct company. Many customers who avoid agents because they may be pressured with upselling still buy from agents and just opt out of the personal relationship.

But if a policyholder wants to establish a relationship, get advice, compare policies and companies, or see if they can trust the agent by asking questions of them…they get that for the same price as when they choose not to deal with the agent. The character Phil from the movie "Groundhog Day" is a 33-year-old relic of an expired era. The Phil of 2026 is an agent skilled in target marketing, pleasant to talk to, a master of quoting and service technology, and backed by the knowledge of how different carriers and policy coverages compare.

The difference between direct and agent carriers is not an advantage in technology. The right technology to make an agent match bytes with direct companies arrived long ago. The difference is something deeper. Insurance, at its core, is a trust-based business because customers aren't (and don't want to be) insurance experts. They are often willing to pay for good advice, accessing expertise similar to financial planners' or lawyers' advice. They don't want to be the expert and are willing to "outsource" some of the research and shopping duties to agents who are experts. No, the difference is the human one.

The end of agents has been greatly exaggerated

Digital transformation has brought more than new distribution channels. Faster quoting, clearer documentation, easier billing, and 24/7 access have raised expectations for what constitutes "good service." AI has given the industry the power to analyze property photos, process claims in seconds and offer precise pricing models that used to take teams of actuaries weeks to complete. Efficiency and convenience are no longer difficult to achieve. Even some of the most tech-savvy customers still crave a human guide when making complex or emotionally charged decisions, especially when they buy more than just a single insurance product.

Independent agents have filled the role of a modern Phil better than any channel the industry has ever created. They don't just sell products; they interpret needs and weigh risks. They explain coverage gaps in plain language. They advocate for policyholders when applying for insurance or when claims get complicated. They ascertain the promises made at policy purchase are kept when it matters most. It's that advocacy that builds trust. And trust, in a low-engagement category like insurance, is the currency of success.
Your local agent attends the same events you do, drives on the same roads, has the same neighbors, shops in the same stores and sends her kids to the same schools you do. The money they make is returned to your neighborhood and not shipped far off to a global financial headquarters and its investors.

Research from McKinsey has found that 20% of customers would switch carriers if their agent stopped representing that company. That isn't because of price or convenience, it's because agents still represent a relationship. In a digital marketplace defined by algorithms, the human element has become a differentiator, not a disadvantage.

When "faster" isn't always "better"

There's no question that digital tools, such as AI, have made insurance more efficient. It's predicted that automation could boost productivity by up to 40%. But speed is only a part of what makes for a satisfied customer. AI can route claims, flag anomalies, and answer common questions instantly. It cannot empathize when a family's home is uninhabitable or when a customer's entire sense of security is destroyed by a hurricane or a fire. Judgment should never be left to AI, only informed by it. AI is unaccountable to the decisions it makes and ignorant of the ethics of how such decisions are made. The human takes the risk of making bad decisions or giving bad advice and lives with its consequences. AI does not.

Think about when, in the claim transaction, a human matters the most. J.D. Power's 2025 U.S. Auto Insurance Study found that insurers combining strong digital tools with human agent support see 20 to 25 points higher satisfaction than digital-only models. Customers who feel understood tend to be more forgiving when it comes to hiccups.

Our reluctance to embrace the drop in severe injury offered by automated vehicles is because we know the automation is unsympathetic to tough situations. They may make the right decision, but don't express compassion the way a human does. When a customer experiences process delays or pricing changes, they will forgive an emphathetic human…not a synthetic voice. Some 68% of consumers say they stay loyal to brands that show empathy during difficult times. They are more likely to stay, renew and recommend. A good agent can turn an underwriting decision into a conversation, not a rejection. They can deliver bad news in a way that still builds confidence.

While automation can handle the mechanical side of the business, humans remain essential when emotional judgment is required. As AI gets smarter, empathy becomes a competitive advantage.

Technology as an enabler, not a competitor

Let's be honest; the industry hasn't always told the right story about technology. Too often, we lead with cost savings and automation, focusing on how they benefit us rather than how they benefit our customers. When profits become the headline, we send the wrong message that we're more interested in our results than in the people who pay for them.

That's not the reputation any insurance company wants.

Instead, what if success were measured by profit margin growth only when claims payments grow faster? Call it the self-serve ratio. Now imagine a metric that tracks customer satisfaction points per point of underwriting profit—the satisfaction ratio.

The promise of technology over the last 30 years has fallen short. We have gained only a few expense points for a ten-fold increase in technology costs. Yet, customer satisfaction lags. Technology should make it easier to talk with customers, not harder. Automated response systems—voice, chat, email or self-serve—still don't provide the same range of assistance as a human can. When automation handles repetitive work like quotes, documents, and follow-ups, agents get back what matters most: time. Time to listen. Time to anticipate. Time to be human. Don't give that time back to a computer.

The companies that win the next decade won't be those that remove human expertise from the experience. They'll be the ones that make the human—and the customer in particular—indispensable.

Why the human touch still wins

Insurance is one of the few products people buy hoping they'll never need to use it. Customers rarely understand paying more when they haven't had a claim. But most of our customers have no claims. This paradox makes relationships with the customer vital. Explaining why the payment is not into a "black hole" can't be left to a Google search or chatbot discussion. If a claim does occur, the emotional stakes are high. The winning carrier is the one with an employee who genuinely cares about helping.

AI can predict the probability of a loss, but it can't comfort someone who just experienced one. Agents turn conversations into confidence. They make the promise of insurance real by adding judgment, empathy and trust.