7 Trends Transforming Personal Lines

• By: AnneMarie McPherson Spears
• February 28, 2026

In my 18 years in the insurance industry, 2025 was the toughest year in my career,” says Daniel Rohrbaugh, president of Raleigh Insurance Group in Raleigh, North Carolina, member of the Big “I” national Young Agents Council (YAC), and immediate past chair of iLEAD, the YAC of the Independent Insurance Agents of North Carolina (IIANC).

The reason? Personal lines. “I can explain market trends and rate cycles and people understand that. That’s not the hard part,” Rohrbaugh says. “The hard part is when customers come to me with: ‘I’ve seen my rates go up 50% and I have not filed a claim.’”

Rohrbaugh started his insurance career in 2008, working as a State Farm team member for nine years before launching his own agency. “I reached out to the Independent Insurance Agents of North Carolina and simply asked them, ‘How do you start a scratch agency?’” he recalls. “I started out of a back bedroom at my house with auto, home and life.”

He started his agency when personal lines was “pretty easy” by comparison, he says. But over the past couple of years, “we are seeing rate increases that the residents in North Carolina are not used to and have never seen,” he says.

And it’s true all over the country. In fact, the phrase used by many agents to describe personal lines in their region has been “dumpster fire.”

But when will the flames be brought under control? How are shifting trends impacting independent agents’ personal lines strategies? And what do clients want from their insurance relationships? Here are seven trends for the future of personal lines insurance.

1) Personal lines stability will improve.

After several challenging years, the U.S. homeowners insurance segment finally joined the rest of the U.S. personal lines outlook as “stable” in November 2025, according to AM Best’s “Market Segment Report.”

“Homeowners had been deeply impacted by inflation, elevated weather activity and a hard reinsurance market—coupled with more restrictive regulatory bodies in some states,” explains Chris Draghi, director at AM Best. “Carriers required time in addressing these challenges through rate increases and refinement to underwriting risk appetites. These actions have led to meaningful improvement in recent periods, influencing the decision to revise our outlook to stable.”

“Another key consideration is the expectation for reinsurance pricing to moderate, providing an opportunity to carriers to record some cost-savings or strengthen reinsurance programs,” Draghi adds.

Looking at the rest of 2026, “we anticipate the personal lines outlook to remain stable in the near term,” Draghi says. “It remains important for agents to work closely with the insurance carriers in developing a sound understanding of risk appetite. With customer shopping increasing, and modest rate decreases being observed in the market, some softening may develop in the near term.”

However, AM Best is monitoring trends that could affect the health of the personal lines market for better or worse over the next few years. While claim frequency has been declining, severity continues to rise due to economic and social inflation, rising medical costs and supply-chain disruptions, according to AM Best’s “Market Segment Outlook: US Personal Lines.”

“As such, rate adequacy is top of mind. Many carriers have diligently increased rates and refreshed algorithms to account for current trends,” Draghi says. “However, severity trends have yet to stabilize, which may lead to additional rate need. That said, increased competition may lead to rate reductions, which will be monitored.”

Rohrbaugh has observed that “carriers are feeling better about the actions they’ve taken and they’re feeling better about the outlook over the next 12 to 24 months,” he says. “We better understand what we can expect in 2026, at least as far as new business goes.”

Personal lines market access options are available to Big “I” members through Big “I” Alliance. “The Big ‘I’ Alliance Blue program offers free access to multiple personal lines markets, including standard and nonstandard auto and home as well as personal umbrella, flood, and jewelry coverage,” says Summer Cole, assistant vice president of Big “I” Alliance Gold. “The fee-based Big ‘I’ Alliance Gold program is an alliance network that can connect agents to appointments with dozens of carriers. A dedicated Alliance Gold staff works with Gold agencies to open doors to new carrier partnerships and maximize profit-sharing opportunities.”

“All Alliance programs are designed to help Big ‘I’ members large and small grow their businesses in an accelerated yet sustainable way,” Cole says.

2) Rates may start to soften.

With personal lines enjoying firmer footing, the billion-dollar question is: When will personal lines rates actually begin to decline?

The answer is: It’s complicated.

While some auto carriers filed for rate decreases in 2025, softening will occur “state by state and customer by customer,” says Craig Martin, executive director, global insurance intelligence at J.D. Power. “Each carrier is going to have a different risk appetite, underwriting approach and acquisition strategy—each carrier is thinking about long-term who their target customer is.”

Rohrbaugh’s clients in North Carolina are still seeing rate increases because “there’s a lag effect—actuary takes place 12 to 24 months prior, and then it takes another 12 months to get it through onto a policy,” he says. “If we have labor rates, lumber rates and steel prices doubling, and now tariffs, insurance has got to play catch-up. We have clients whose premiums still aren’t where they’re supposed to be.”

While there are plenty of those difficult conversations to be had, Rohrbaugh has begun to see rate decreases—albeit more on auto than homeowners. And with carriers more optimistic about 2026, “we have some rate stability coming,” he says.

Mark Garvelli, vice president of the personal insurance division at Walsh Insurance in Buffalo, New York, is also “cautiously optimistic that we’re reaching a little bit of stabilization,” he says. “There is moderation in the rates, and the increases we’re seeing are not as bad as the double digits we had been seeing over the last couple of years.”

But then there’s California. After the exodus of carriers from the state, the question agents are asking isn’t “when are rates coming down?” but rather “when will markets reopen?”

“I don’t want to use the word ‘despair,’ but it comes very close to how we’re beginning to feel,” says Armenn Karlubian, owner of Karl Insurance Services in Woodland Hills, California. “Every time we place something in the excess & surplus space, we lose coverages that exist in the admitted market. The exposure disturbs me. But I cannot create coverage. My job is to offer it, not create it.”

“There’s a lack of information about what’s going on with insurance companies, and a lack of a meaningful response by the government to the crisis that is so out of control,” she says.

Karlubian does write business with one carrier that has begun accepting homeowners policies, but the guidelines are very stringent. “I can only hope that some markets will start reopening soon,” she says. In the meantime, her agency’s response has been “to be creative, put a FAIR Plan policy in force, write a wrap-around policy, and insure the client to the best of our ability.”

3) Shopping and switching will remain high.

The “Loyalty Indicator & Shopping Trends” (LIST) report from J.D. Power, conducted in collaboration with Trans­Union, shows that auto shopping has decelerated but still remains active, with a 13% shopping rate in the fourth quarter of 2025. The switching rate was at 4.1%, down from the all-time high of 4.5% in the third quarter.

Meanwhile, 47% of homeowners insurance customers experienced insurer-initiated rate hikes last year, the highest level in more than a decade, according to J.D. Power’s “2025 U.S. Home Insurance Study.”

As a result, homeowners are exhibiting an unusual willingness to shop, Martin says. Among homeowners who say they are unlikely to renew their policies, 43% point to recent price hikes as the reason.

While many homeowners pay their insurance policies through escrow accounts, meaning that premium increases are often not very transparent, “mortgage servicers have a vested interest in communicating with their customers about what’s going on, rather than getting blamed for a price increase that is separate from their business,” Martin says. “We’re actually seeing communication from mortgage companies saying, ‘Your home insurance is likely to go up in the next year—do you want to shop?’”

“We had seen, particularly in the homeowners space, the average tenure decreasing,” Martin says. And looking into the rest of 2026, “I think we’re going to continue to see a fairly strong level of shopping and switching,” he says. “It’s easier to shop than ever.”

But should customers shop? Raleigh Insurance Group educates its personal lines clients on the potential pitfalls, emphasizing that while it may be easy to switch, it may not always be the best choice.

“We have automated renewal notices that go out to customers, including asking them if anything in their life has changed—teenage driver, home addition, new roof—and if they have, that’s an opportunity to shop,” Rohrbaugh says. “If the client has questions about a rate increase, my team is equipped to show comparisons.”

The key question is: Is it worth it?

In the current industry climate of strict underwriting guidelines, “we have to be very careful about switching,” he explains. “There are some carriers for which a roof older than a decade is ineligible. Most carriers are doing home inspections.”

“When eligibility becomes tight, you’re making sure you’re at least insurable, and not so much what you’re paying,” Garvelli agrees. “What the hard market did was help us educate our consumers that insurance isn’t just a price-driven commodity.”

“We’re definitely being more selective about what we shop and when we switch business,” Garvelli continues. “We’re looking at how companies are underwriting risk, especially in the homeowners market, where we’re not randomly moving people to save a few dollars anymore. Those days are pretty much gone.”

Also, longevity with a carrier matters, Rohrbaugh says. “If I have a customer that’s been with a carrier for a while, I can go to bat for them.” But if a customer makes a habit of switching carriers every one or two years, “they don’t have much ground to stand on,” he says.

4) Artificial intelligence (AI) will bring opportunities to balance speed and trust.

When it comes to AI in insurance, there’s no going back—and companies are getting the message.

“Carriers are understanding that we cannot continue to operate the way we always have,” Rohrbaugh says. “Carriers that lean in and leverage AI are going to simply outperform legacy carriers in speed, accuracy and customer experience.”

However, while consumers are keeping an open mind about insurers using AI, they are concerned about who will truly benefit from its usage, according to J.D. Power. Customers are most comfortable with AI when it automates routine aspects of their experience, such as sending claim status updates (24%), managing their billing (23%) and answering basic customer service questions (21%). But 47% are somewhat or very uncomfortable with AI being used to process their claims, indicating a clear boundary between convenience and trust.

With customer trust and loyalty already eroded by years of price hikes, Martin emphasizes the importance of agent communication to win consumers over.

“It’s key to communicate how it [AI] makes the industry faster and more efficient, which means we’re going to save them money, time and make it easier to access information at any time,” Martin says. “That’s why independent agents continue to be a critical part of the insurance landscape: helping their customers understand where this fits in their world and what’s really valuable to them. It’s the human side of things that will differentiate brands in the future.”

As AI continues to develop, “I think we’re going to see more strategies built around the ethics of using AI,” Rohrbaugh says. For example, “Are carriers going to be required to share the decision-making process with the client, rather than just sending a generic declaration letter?” he asks.

Independent agencies are increasingly using AI, with 1 in 3 agency employees reporting using AI for work in the past year, according to Liberty Mutual’s “2025 Independent Agents at Work Study.”

Rohrbaugh believes AI will only become more crucial. “I can see it getting to a point where carriers are going to qualify and disqualify agencies based on the technology they have in their office,” he says. “If an agency isn’t utilizing the tools that are available, does a carrier want to partner with them?”

AI is also becoming increasingly established as a way for agents to meet clients’ expectations for timely communication and personalized service—and to survive the ongoing challenges of the personal lines market, according to Liberty Mutual.

“Our perspective is that we focus on having a ‘human in the loop,’” says Rob Bourne, senior vice president and general manager of EZLynx. “It then becomes a question of: ‘How can we enable the agent to focus on the highest value activities while automating the lower-value pain points?’”

Agency principals said they plan to leverage AI to identify opportunities for cross-selling (58%), assist in marketing content creation (53%), automate routine service tasks (52%) and create personalized customer communications (46%), according to Liberty Mutual’s “2024 Agent-Customer Connection Study.”

“Speed is everything in personal lines,” Rohrbaugh says. “You need to be able to qualify prospects as quickly as possible, you need to speed up your quoting process, and you must make sure online portals and self-service are being utilized. The personal lines agents that don’t embrace the technology at their fingertips, I dare to say, will get left behind.”

“In the near term, there’s a place where AI can jump in and meaningfully reduce the amount of time agents have to spend on those areas,” he adds.

Speed is valuable to customers, too. Eighty-three percent expect their agent to respond to inquiries within one business day, and 35% expect a response in an hour or less, according to Vertafore.

But despite these high expectations, more than 1 in 4 say they are uncomfortable with their agent using AI. The vast majority—85%—of consumers want to know when AI is being used, regardless of their comfort level.

Meanwhile, customers place significant value on the human expertise offered by their independent agent. While 45% of consumers use AI for financial planning, only 17% consider it a primary source for information about insurance products and coverage, according to a Nationwide survey. Despite the growing presence of digital tools, over half of consumers (56%) say they never use AI for information about home or auto insurance.

“I see it every day: the lack of consumer knowledge and the need for the information we provide them,” Karlubian says. “The coverages they never thought about, the stuff they never thought they would need.”

“They would really have a problem if they trusted AI to take care of their insurance needs and then, God forbid, something happened and they realized only then they didn’t have coverage,” she adds.

As the personal lines industry balances the dual needs of speed and personalized advice, “there’s a lot of opportunity for agents and carriers to reestablish trust with customers,” says Sarah Griffin, senior vice president of personal lines product and underwriting at Nationwide. “Agents are going to need to blend their expertise and customer focus with AI-augmented tools and capabilities and retain customer loyalty through increasingly personalized and value-added experiences.”

5) Telematics and proactive risk management continue to emerge.

Last year, Nationwide launched its Telematics Property Discount, which connects driving behavior to homeowners policy discounts. The product is a forerunner in expanding auto telematics data to inform risk assessment and pricing in other personal lines, as well as inform insureds about their behavior and how it can impact pricing.

“As the industry continues to face challenging trends like inflation and extreme weather, we believe it’s critical to educate consumers on their role in risk mitigation, and how safe behaviors and even small steps can prevent damage and remove some cost from the insurance equation,” Griffin says. “As an industry, if we’re successful in beginning to shift behaviors at scale to a predict-and-prevent mentality, I believe that’ll start to reflect in loss performance patterns.”

“For agents, this shift presents a powerful opportunity to deepen client relationships and lead the way in modern risk management,” she says.

As the risk landscape changes and technology evolves, personal lines will continue to move away from more traditional models toward personalized, technology-enabled solutions, Griffin predicts.

“We’re seeing improved technology and more intuitive and responsive telematics experiences that help create transparency and visibility for the customer and the agent,” Griffin says.

Agents are helping clients shift from reactive coverage to proactive prevention. As many as 85% of agents now recommend smart-home technology to reduce risk, including smart smoke and carbon monoxide sensors (62%), door locks (59%), and water flow sensors (58%), according to Nationwide’s “2025 Homeowners Report.”

For example, Walsh Insurance’s personal lines agents have become more involved in risk mitigation “as underwriting started to tighten up, to make sure our customers were still insurable,” Garvelli says. “Auto telematics is a little more established, but quite a few cool things are happening in homeowners telematics.”

“We’re seeing a little more telematics on the homeowners side with water loss prevention, as it’s often carriers’ No. 1 loss,” he continues, also mentioning a regional carrier that endorses a device that monitors a home’s electrical flow. “We educate customers on the state of the marketplace and how these things can help your insurability down the road,” he says.

Still, customer buy-in for telematics and proactive risk management remains an uphill battle. Only 27% of homeowners have a smart water sensor, and just 23% have electrical fire monitoring devices, according to Nationwide.

“We have a very small percentage of our client base using telematics where we’re located in North Carolina,” Rohrbaugh says. As far as risk mitigation goes, “on the coast, FORTIFIED roofs are becoming a popular thing, and North Carolina does have a grant program for those,” he says. “Everyone could use a nice FORTIFIED roof, but a hundred miles inland, we’re not seeing the demand. We are seeing carriers roll out automatic water shutoff programs.”

But he foresees the situation changing in a couple of years. “With more AI, underwriters will be more empowered with things like validating that tree limbs have been cut back so the customer can get a credit,” he says. “The more that underwriting can accurately rate a risk rather than blanket underwrite, it should give favorable pricing to desirable customers.”

6) A complicated market emphasizes the agent’s role.

More than half—57%—of homeowners worry that their policies may not cover specific damage or incidents, according to Nationwide. Homeowner concerns include rising premiums (43%), severe weather (39%), unexpected repairs (37%) and aging home systems (34%).

“Nearly half of all homeowners, and 57% of Generation Z and millennial homeowners, said they spoke to an agent over the last year to better understand their coverage,” Griffin says, “highlighting again that despite the explosive growth we see in AI-powered information, customers still value the expertise and reliable advice from an agent.”

The No. 1 thing personal lines clients want “is to understand their coverage better,” Garvelli agrees. “They want to feel confident that someone like us will be with them for the long haul, including clarity and advocacy when things go wrong.”

“It’s going to evolve over the next few years where we are being more proactive and guiding them,” Garvelli says. “We need to be giving customers the confidence that these decisions are being managed with a long-term view, not just a short-term window on price.”

Meanwhile, personal lines clients face growing risks, meaning agents’ trusted advice is necessary to raise awareness of important protections that go beyond the basic homeowners policy, according to The Hanover’s “2025 Homeowners Coverage Awareness Report.”

“The personal lines risk landscape is becoming broader and more complex, including personal cyber exposure, personal liability lawsuits, and uninsured or underinsured valuables,” says Daniel C. Halsey, president of personal lines at The Hanover.

A key blind spot is cyber coverage, “which offers peace of mind and financial protection against increasingly common digital threats,” Halsey says. “We are online more than ever. Despite these risks, The Hanover found that only 7% of U.S. homeowners currently have cyber coverage, and less than half are even aware of this coverage. Independent agents play a critical role in closing this awareness gap.”

Personal lines consumers often assume standard homeowners policies provide more protection than they actually do, Halsey says. “Our research showed the majority of homeowners reported they had not discussed coverage options such as umbrella, personal cyber, valuable or recreational vehicles with their insurance company or agent,” he says.

Education can make all the difference. “In fact, our research found that interest in umbrella insurance rises significantly once consumers are given a clear explanation of what it covers,” Halsey says. “While only 23% of homeowners have an umbrella policy, 66% say they would consider adding one after learning more.”

For Karlubian, offering a personal umbrella policy, which her agency provides through the Big “I” Personal Umbrella program, is a crucial way to “protect our clients’ assets,” she says. “Once I explain it to them, they see the need even if they’ve never thought about it before.”

Her agency is heavily commercial, but offering personal lines is a necessity. “The call to get into personal lines was self-evident,” she says. “We build trust with our business owner clients, and then they come to us for home, auto and umbrella. Otherwise, you’re not servicing an account, just a policy.”

7) Personal lines agents will remain a crucial partner in insurance distribution.

Will AI replace agents? Each time a new technology hits the shelves, agents face predictions about their extinction. And once again, reports of the personal lines agent’s demise are greatly exaggerated.

“I don’t see agents disappearing from the equation at all with personal lines,” says Doug Mohr, vice president of industry relations and partnerships at Vertafore. “In fact, I ask every one of our customers, ‘What does your book of business look like? What’s the health of that?’ And most agents I talk to, their personal lines book is growing at a double-digit rate. It really impresses me how much our agency customers continue to grow and expand their personal lines.”

“What that tells me is, when a direct writer falters and stumbles, it gives sales opportunities to independent agents to capture that business,” Mohr says. “A claims experience, a renewal experience, the need for a relationship—consumers don’t get that with the direct writer.”

“The [independent agent] market is frankly as robust as ever, with high growth in our business,” Bourne agrees. While AI will impact agents’ role in personal lines, it will be by “enhancing and enabling them to do the highest value things as quickly as possible, balancing technology with the best service processes,” he says.

Consumers agree that agents remain essential. Nearly 90% of policyholders want an agent involved when managing their policies, according to Vertafore. Eighty-five percent of policyholders prefer an agent-assisted search when shopping for insurance, 62% want to only work with an agent and 23% want to combine agent support with online resources.

Further, almost half of policyholders—48%—say they prefer to manage their policy through an agent, and another 41% prefer a mix of agent involvement and digital tools, such as online account portals, mobile apps and digital claims filing systems.

As agents combine efficiency with personalization, their role is evolving “away from transactions and processing toward being the advocate, advisor and interpreter,” Garvelli says. “AI will free up our time to do that.”

“My prediction is that the independent agents who embrace AI will be the leaders, and that’s going to play a huge role over the next one to two years in the personal lines space,” Mohr says. “IAs who embrace AI will have more personalized experiences with their policyholders because they’re going to be taking a lot of mundane tasks out of the customer service representatives’ hands.”

And that’s what people want: the personal touch in a complex world.

“You’ve got to embrace the AI, or you’re going to get left behind by the agencies that can do twice as much with twice as less,” Rohrbaugh says. “It’s helping agency principals like myself build our licensed team members to do what they’re best at.”

AnneMarie McPherson Spears is IA news editor.