The New Model: Why AI Won’t Replace Independent Insurance Agents

• May 13, 2026

By Jack Ramsey

More than $15 billion in insurance commissions could be at risk as artificial intelligence (AI) becomes more embedded in the industry, according to Bank of America (BofA) Global Research. It’s an attention-grabbing figure for sure, but one that oversimplifies how insurance distribution is actually evolving, as well as the broader AI insurance industry impact.

For independent insurance agents, the concern is understandable. Much of the BofA’s analysis centers on routine, lower-complexity policies where AI can streamline parts of the quoting, servicing and placement process. Viewed in isolation, that efficiency can look like a direct threat to agent value.

However, that view is incomplete. Focusing only on what AI might replace misses a more important shift.

In practice, AI is not removing agents from the equation. It’s reshaping how customers approach insurance, how work gets done and where agents create the most value. As the process becomes faster and more efficient, the role shifts from transactional work to more consultative, higher-value work, a key evolution in AI for insurance agents.

Why AI Won’t Replace Insurance Agents

The $15 billion figure reduces a complex industry to a single assumption: If AI can handle parts of the process, it can replace independent insurance agents entirely.

In reality, insurance distribution is more nuanced. The impact of AI varies widely across lines of business. Personal lines like auto, home and renters insurance have been moving toward more digital, self-service models for years, with customers increasingly comfortable researching options and starting the process on their own. But even in those markets, agents still play a significant role. Digital tools have changed where and how agents engage in the process, not whether they are needed.

That difference is even more pronounced in small commercial insurance, where policies are tied to a customer’s livelihood. When business owners make insurance decisions, it directly impacts their financial health and long-term continuity.

This is where the replacement narrative breaks down. It assumes that automating individual tasks leads to eliminating the role entirely. But those activities represent only part of what agents do.

The independent insurance agent proposition includes helping clients interpret information, weigh tradeoffs and make informed decisions. This is especially true as customers approach their agents having already accessed more information and formed clearer expectations—an area where AI enhances, rather than replaces, the agent role.

How AI Is Actually Changing Insurance Workflows

For many agents, small commercial accounts have long been difficult to serve profitably. Lower premiums combined with time-intensive workflows have made it hard to justify the effort required. AI is beginning to change that.

As more agentic AI capabilities emerge—systems that can take action, navigate workflows and move tasks forward across quoting, servicing and placement—the time required per account is decreasing and smaller policies are becoming more viable at scale.

This represents a tangible AI insurance industry impact on operational efficiency:

• Faster, easier quoting. With fully digital small commercial carriers, AI is streamlining intake and eligibility, reducing the number of questions required and accelerating time to quote. What once required significant back-and-forth can now be completed more efficiently, making it easier to move smaller accounts forward.
• Improved self-service. Some routine servicing tasks no longer depend on agent availability. Customers can access documents, make updates and retrieve proof of insurance on demand, whether at a job site early in the morning or outside normal business hours. This reduces servicing volume and frees up agent capacity.
• Better use of data in underwriting and recommendations. By connecting a submission to patterns across similar businesses, AI can surface common coverage selections and risk considerations, giving agents a more relevant starting point for the conversation.

3 Ways Agents Can Add Value As the Role Evolves

As AI reshapes how insurance is bought and sold, the agent role is now more focused. The agents who succeed will be those who adapt how they engage with customers, use technology more intentionally and apply judgment where it matters most.

As AI continues to integrate into the insurance distribution model, here are three ways agents can add value to clients:

1) Meet customers where they are. Customers are no longer starting from zero. Many arrive with prior research, AI-generated insights or preconceived ideas about what coverage they need.

Instead of restarting the conversation, begin by understanding what the customer already knows. Ask what they’ve seen so far and how they are thinking about their coverage. For example, you might start with something as simple as, “What have you looked into so far?”

From there, you can tailor your advice, clear up misconceptions and guide the conversation toward the right outcome. This shifts the dynamic from one-sided education to a more collaborative exchange.

Customers are also engaging through a growing mix of channels, from direct-to-carrier experiences to embedded platforms and traditional agent relationships. The ability to meet prospects wherever they enter the process will increasingly define where agents add value.

2) Use AI to eliminate friction, not outsource judgment. AI is most effective when applied to repetitive, time-consuming tasks. Quoting, intake, carrier identification and surfacing common coverage patterns can all be streamlined, reducing the time required per account.

That efficiency frees you to spend more time where it matters most: evaluating complex risks, making nuanced coverage decisions and guiding clients through tradeoffs.

3) Embrace AI, but don’t buy into the hype. AI is becoming a core part of how insurance gets done, and that will only accelerate. Staying open to how it can improve agency workflow can help you operate more efficiently and better serve your clients.

At the same time, not every new tool or headline warrants immediate adoption. AI is still evolving, and its outputs are only as reliable as the data behind them. Customers recognize this and often look to agents to validate what they are seeing.

That puts agents in a critical position. Your role is to interpret AI-driven insights, apply context and stand behind the recommendations you make. Take advantage of what the technology enables while maintaining the judgment and accountability that define the role.

The conversation around AI in insurance often centers on what might be lost. In practice, the shift is less about displacement and more about how the independent agent role is evolving.

As AI takes on more of the repetitive, time-consuming work, it is changing where agents spend their time and how they deliver value. Now, an agent’s role increasingly centers on what technology cannot replicate, from understanding context and guiding decisions to building trust with clients.

Customers are also entering the process with more information and clearer expectations. They are exploring options across multiple channels, forming opinions earlier and looking for validation before making decisions. That shift changes how and when agents engage, but it also creates an opportunity for more informed, more productive conversations.

Jack Ramsey is vice president of the agent channel at ERGO NEXT Insurance.