5 Ways Insurance Agencies Can Grow In 2025

Have you noticed that insurance ads are suddenly showing up on TV again? As the hard market eases, and carriers transition back into growth mode, it’s an exciting time to be in the insurance agency business. Rates are stabilizing, coverage capacity is opening up, and after a few years of navigating the hard market, many policyholders have learned to appreciate and rely on their agents a little more. 

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When carriers open their quote spickets, agencies must be well-positioned to manage an onslaught of new business. Is your agency ready? Here are some eye-opening facts to help your agency efficiently scale.

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Insurance Agencies – By the Numbers

According to IBISWorld, the number of insurance brokerages and agencies in the U.S. has increased by 0.2% per year on average between 2018 and 2023. As of 2023, there were 417,730 insurance brokerages and agencies in the U.S. Within the total agency landscape, the independent agency channel placed 87% of commercial lines written premium and 39% of personal lines written premium in 2023, according to the Big “I” 2024 Market Share Report. 

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The chart below shows the number of agencies that exist by state, based on Liberate research:

New Agency Opportunities Emerge from the Hard Market

Sourcing affordable insurance has been difficult over the past few years. Some policyholders have even been dropped by their carriers. Due to this uniquely challenging insurance environment, both commercial and personal insurance customers may now seek an agency’s assistance – even if they used to be comfortable buying insurance on their own.

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Another development coming out of the hard market is that insurance consumers have been conditioned to shop. For example, in the first quarter of 2024, 42% of insured households had shopped for auto insurance coverage in the last 12 months, according to LexisNexis.

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If you can stand out from your competition, and appeal to the insurance shoppers, you can win new market share. If you can prove your value, you can retain this market share – even after insurance prices soften.

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How Can Agencies Stand Out in a Crowded Market?

To seize this opportunity, insurance agents need to give policyholders what they want – and those demands have evolved. Here are some key experiences policyholders expect now. 

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#1: Responsive Phone Service

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Several studies have found that insurance shoppers typically conduct research online and then call an agent when they’re ready to buy. Here are some insightful statistics:

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• 78% of insurance consumers sourced by LSA said that because of the complexities and multi-step process of gathering an insurance quote, they will often pick up the phone after searching for their answers.
   
• For more-complex journeys such as buying a policy or resolving an issue, more than 70% of customers prefer in-person interaction with an agent or third-party representative, according to McKinsey & Company. 
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72% of auto insurance shoppers speak to an agent during their purchase journey, followed by 67% of home insurance shoppers. The more complex the purchase, the more likely insurance consumers are to speak to a live agent. (Sources: Invoca – citing J.D. Power, xAd, xAd, LL Global, S&P Global).

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#2: Omni-Channel Journeys that Include Personal Touch

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It’s easy to assume that Gen Zs and Millennials prefer to use technology when interacting with companies. While Celent research confirmed that assumption, they also found something surprising – more than 40% of insurance agents born after 1946 like to use technology combined with a phone call to confirm information. 

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Even more surprising, a significant portion of them actually prefer to do everything by phone, email or in-person, rather than using technology such as an app or portal. While this study involved a survey of insurance agents, rather than insurance consumers, it stands to reason that their similarly-aged insurance consumers may feel the same way.

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#3: Zero wait time. 

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Now that you know that phone service is essential, it’s also important to recognize that most people aren’t willing to wait on hold for long. Consider these findings: 

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• 3 minutes and 24 seconds is the average time consumers wait on hold when calling insurance providers. Across the industry, consumers often have to wait to speak to a live agent and make a purchase. If you can lower this hold time, you’ll gain a competitive advantage. (Source: Talkdesk)

• 1 minute and 30 seconds is the average wait time after which most callers will hang up. Many insurance callers have to wait longer than the average hang-up time to speak to a live agent. This results in lost sales and frustrated customers. (Source: AT&T)

Claims happen around the clock – not just during business hours – so policyholders also expect to be able to reach someone after hours and on weekends through their preferred communication channel. There’s no question. Agencies that can’t provide instant, around-the-clock service will lose business.

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#4 Multilingual Capabilities.
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Roughly 91% of the US population speaks only one language. Of those, 87.6% speak English and 7.2% speak Spanish, according to a 2024 study by Start.io. The third most popular language varies by state, and includes Russian, Persian, Portuguese, Chinese, Arabic, Korean or French. The most linguistically diverse states are New Jersey, Florida, California, New York and Texas. 
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Agencies that want to appeal to the entire market should have multilingual capabilities. Yet, of the 417,730 insurance brokerages and agencies in the U.S., only 5,800 or so can provide insurance services in Spanish. It’s easy to imagine how having multilingual capabilities could help your agency stand out – especially if you operate in a linguistically diverse state.

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#5: Personalization. 

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Research from McKinsey & Company shows that 71% of consumers expect companies to deliver personalized interactions, and 76% of consumers get frustrated when they don’t receive personalized experiences. This is true across all industries, but insurance, in particular, can be a deeply personal purchase. 

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If an insurance representative can access policyholder records and data to provide personalized recommendations it can make a substantial difference in customer satisfaction levels. After all, everyone has slightly different risk exposures, and they’re buying protection for some of their most valuable assets. Consumers tend to be a little uncertain about insurance coverage. In fact,  a ValuePenguin study found that 45% of Americans don’t know which natural disasters their homeowners insurance covers. 

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In the insurance business, there’s a lot at stake, so personalized interactions are essential. Insurance agencies that can deliver personalized, data-informed services will have an edge over those who do not. 

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How Friendly AI Agents Can Help Your Agency Grow and Scale

The insurance customer service bar has been raised. It’s one thing to say that agencies should provide fast, omni-channel, multi-lingual, hyper-personalized customer service, 24/7 with no hold time. It’s another thing to actually deliver on these goals, especially when human resources are limited. 

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Given consumers’ ever-increasing expectations, and the shrinking insurance workforce, it may seem like smaller agencies have no chance of competing against larger players – but thanks to AI, that isn’t true.

Independent insurance agencies of all sizes can affordably leverage friendly AI agents to answer phones with zero wait time and deliver exceptional, multilingual customer service. And that’s not all. Voice AI can be integrated with existing systems and orchestrated with your digital FNOL and other workflows to achieve even more – cost-effectively and proficiently.

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Ask Liberate to show you what’s possible. Learn more.