Insurance agency networks, which serve as vital support structures for independent insurance agencies, are adapting to industry changes through strategic investments, data-driven decision-making, and a commitment to leveraging new technologies, experts say.
More specifically, data has become an essential component of maintaining strong carrier relationships and driving network success. Transparency and data utilization have become essential for agencies that want to remain competitive, said Steven Pearson (pictured), president of ISU Steadfast Insurance Agency Network.
"I think the Insurance Network Alliance has helped educate both less sophisticated agency networks and, by trickling down, agencies themselves, on what are the new table stakes to thrive in the new environment," Pearson said.
Carriers are no longer satisfied with vague commitments, but by leveraging data, networks can identify trends, create specialized programs and provide members with targeted growth opportunities.
"I recall probably about a year ago, five carriers were saying loud and clear in our panel: ‘Don’t give me a promise—show me the money. Show me what you're actually doing.’ And a lot of agents weren’t capable of doing that; they weren’t mining their own data very well," he said.
"Most agency networks collect data from their members, then aggregate that. They look for trends, they look for commonalities and for opportunities. If a network discovers that among all their agencies there’s a significant premium in certain niches, it might make sense to create a program that is exclusive or semi-exclusive, helping their agent plant grow and be more successful."
Furthermore, the ability to collect and analyze data is what sets agency networks apart from informal cluster groups.
"A lot of cluster groups are a great social club, and they might share, ‘Hey, I landed this piece of business with this carrier,’ but it’s not a structured sharing of information, of data. Nor can one agent really speak for the others in the cluster. They're just the spokesman this year, whereas an agency network has more ability to truly represent the agencies as a group," Pearson said.
With networks facing challenges in managing their extensive relationships, staying ahead is more important than ever before. Managing these relationships while keeping up with shifting industry demands requires a sharp focus on data and digital solutions, and strategic investments play a crucial role in this advancement, said Mike Strakhov, senior vice president - agency banking market leader at Westfield Bank.
"If you think about it, some networks have thousands of members, work with hundreds of carriers, and serve tens of thousands of insurance customers," he said. "Networks have planned and made commitments with their carrier partners and need to manage progress toward growth goals, monitor loss ratios and retention, and in some cases, calculate the commission to be paid to members. This is a daunting task."
Technology is increasingly central to how networks operate, with Artificial intelligence becoming one of the most disruptive forces in the industry today, according to Diane Wagner, vice president of strategic planning and education for First Choice MarshBerry Company. She said that AI is not a gradual shift—it is already reshaping the industry.
"The next biggest thing is AI, right? And it’s not going to be a 10-year progression. AI is here. It was here overnight," she said.
However, keeping pace with AI innovations is a major challenge for agencies. The resource gap is a major hurdle, as many lack the time or capital to assess every new AI-driven tool. To bridge this gap, INA plays a key role in simplifying the evaluation process.
"If we can create a checklist to take our members through that [analysis], I think it would be a huge, massive benefit, no doubt about it," Wagner said.
"People ask: ‘When will the independent insurance agency go extinct?’ I think as long as they use technology and are efficient, their personal contact with customers will outweigh all the machines and AI engines trying to predict what customers want," Pearson said.
Human connection remains an irreplaceable element in the insurance industry, and as networks evolve to meet these challenges, INA continues to be a guiding force, ensuring that members remain competitive and well-equipped for the future.
"Insurance is critical when you have a loss that could mean losing all your wealth or your home. People don’t want to just click a button—they want someone they trust to be there when it matters most,” he said.
