Technology and artificial intelligence (AI) are reshaping insurance distribution, creating challenges and efficiencies for intermediaries, as insurers balance profitability with customer and agent satisfaction.
Capgemini’s 2025 property and casualty insurance trends report indicates insurers are prioritising broker and agent engagement by making substantial investments in digital tools and training programs.
Digital tools like policy management systems, claims processing software and CRM platforms will reduce administrative tasks and allow agents to focus on sales and policyholder relationships. At the same time, enhancing agent capabilities through data analytics will also enable more cross-selling opportunities for distribution partners and reduce churn, the global report said.
However, this means agents and brokers must be prepared to keep up with the growing complexity of insurer platforms and digital tools.
Coupled with rate hikes, tightened underwriting controls, and a lack of carrier capacity in some lines of business, distribution partners have their work cut out for them in today’s hard market. One expert noted some agents and brokers may feel like they are doing more work for less reward.
"We’ve seen a fundamental shift. A policy that once took one or two touchpoints now requires three, four, or even more,” said Adam Denninger (pictured above), who leads Capgemini's global strategy for the insurance industry. “The amount of work per sale has increased, but the commission structure hasn’t changed to reflect that.”
The challenge isn't just about rising costs; it's about the sheer difficulty of placing business. Insurers are pulling back on certain lines of coverage, leaving brokers scrambling to secure policies in a shrinking marketplace.
"The reality is that agents are caught in the middle,” Denninger continued. “They have to explain to their clients why their premiums are jumping while at the same time struggling to find options that fit within their budgets.”
According to Capgemini’s report, global premiums written by brokers are projected to grow at a 7.8% CAGR from 2024 to 2028, reaching US$1.8 trillion by the end of the period.
In 2023, independent agents and brokers dominated property and casualty (P&C) distribution, capturing 82-87% of commercial line premiums in the UK and the United States.
Denninger indicated that while insurance companies are well aware of the growing dissatisfaction, they’ve been focused on maintaining profitability rather than easing agent pain points. Despite 93% of P&C insurers surveyed by Capgemini aiming to streamline operations with agents, 51% acknowledge that their digitization efforts remain average or below average.
That said, there is recognition that something has to give. "Carriers know that agent frustration is at an all-time high and are making moves to address it. The problem is, these changes take time, and in the meantime, agents are left bearing the brunt of the current environment," said Denninger.
Among the initiatives carriers are pursuing, technology and automation stand out as major areas of investment. Insurers are implementing AI-driven tools to reduce the workload on agents, streamline underwriting, and improve the overall experience.
Some of these technological changes are already taking shape. AI-powered customer service is emerging as a solution to handle routine inquiries and policy changes, allowing human agents to focus on higher-value transactions.
"We’re seeing carriers roll out AI-based systems that can provide instant quotes, answer policy questions, and even help with claims filing. It’s meant to make things easier for agents and customers alike,” Denninger said.
But the adoption of AI also raises concerns. Many brokers worry that increased automation could diminish their role in the insurance process. "There's a real fear that AI will replace human agents altogether,” Denninger said.
“The industry is trying to frame it as a tool to help brokers, but we know that automation inevitably leads to job displacement in other sectors, and there’s no guarantee insurance will be any different.”
Beyond AI-driven customer interactions, insurers are leveraging technology to adjust rates in real time. Traditionally, pricing changes were reviewed periodically, but that approach is becoming obsolete. For brokers, this creates a new challenge: keeping up with rapid shifts in pricing and eligibility requirements while still providing clients with reliable guidance.
Telematics is another area where insurers are making aggressive moves, Denninger said. The use of real-time driving data to assess risk and determine premiums has gained significant traction, with many auto insurers pushing customers to install monitoring devices.
"It’s being sold as a way to reward good drivers, but it’s primarily about identifying risky behaviors and pricing accordingly,” said Denninger. “The ultimate goal for carriers is to get more precise about who they insure and at what cost.”
While some consumers appreciate the potential for savings, others are less enthusiastic about constant surveillance, Denninger pointed out. Brokers find themselves in the tricky position of explaining how telematics works while managing clients' concerns about privacy and fairness.
Despite the headwinds, brokers remain the key point of contact between insurers and policyholders. The question is whether they will continue to play that role in the same capacity as technology reshapes the industry.
Either way, agents and brokers must be more informed, proactive, and engaged than ever before, and engagement means not just keeping up with new underwriting rules but also understanding how AI, telematics, and real-time pricing will impact their ability to serve clients effectively.
"The broker’s role is evolving,” said Denninger. “Whether that’s good or bad depends on who you ask, but one thing is clear: the days of simply selling a policy and renewing it year after year are over.”
What do you think about agents’ and brokers’ challenges as insurer technology ramps up? Please share a comment below.