Two-thirds of independent insurance agencies plan to increase their use of artificial intelligence over the next 12 months, signaling that AI is shifting to near-term operating strategy in the distribution channel.
That momentum comes through in the “2026 Big ‘I’ Agents Council for Technology Tech Trends Report,” which found 38% of agencies are “very likely” and 30% are “somewhat likely” to expand AI use this year.
The top motivations – operational efficiency (60%) and staff productivity (52%) – underscore that agencies are juggling rising customer expectations, gaps in connected workflows, and a flood of AI tools now embedded in core platforms.
But Kasey Connors (pictured), executive director of the Big “I” Agents Council for Technology (ACT), said the uptick in AI adoption is also being driven by accessibility and peer validation. However, significant hurdles remain for the independent channel.
“I think it's a culmination of a few things,” Connors said. “For one, there’s a greater availability of options, maybe too many options.
“AI is entering agencies at a time when many are already struggling with disconnected systems and limited automation. That complexity makes it harder to move from experimentation to meaningful impact. What we hear consistently is that agents aren’t worried about the price of AI; they’re worried about the cost of getting it wrong.”
That “in reach” moment is a major shift from earlier waves of AI experimentation, according to Connors. “Two years ago, (AI) was just in the ecosystem, but it's very tailored for them now,” she noted.
The report’s data suggests AI interest is rising at a time when agencies feel pressed on multiple fronts. When asked their top tech-related challenge, respondents cited keeping up with the pace of technology change (22%), followed by lack of automation and process (16%) and too many disconnected systems (16%).
Connors said agents are also hearing directly from one another that AI is delivering tangible efficiency gains.
“Independent agents are very social people, and they're hearing from their peers that there are clear efficiency gains being made,” she said. “It’s much more mainstream to be talking to agencies about using it for policy comparison, or leveraging an AI chatbot for their front-end customer service staff, or even on commission reconciliation.”
Even with growing enthusiasm, the report underscores how early the market still is. Agencies described their AI usage as just experimenting (33%), not currently using AI (31%), using AI in limited areas (22%), and AI embedded in daily workflows (8%).
Connors said the largest barrier is often simple overload. “I think there’s overwhelm in general,” she said. “While it's amazing that there are so many options now, there are so many AI vendors that it's hard to know where to start.”
But the deeper blockers are structural, and familiar to any agency leader who has tried to modernize workflows on top of messy data and fragmented systems.
“If their entire data house or data hygiene and their systems are not in order,” Connors said, “you can't really leverage an AI system to its fullest if your data is not clean.” She also pointed out the reality of “disparate systems between agencies, insurtechs, and carriers.”
Risk concerns are also slowing the jump from experimentation to production use. In the survey, agencies’ top AI concerns were data privacy or compliance risks (24%) and inaccurate outputs (22%), followed by losing the human touch (17%) and not knowing how to apply AI (16%).
Those concerns are showing up in governance readiness, too: 55% of agencies said they do not have a written AI use policy, while 23% have a policy in development and 13% already have a formal AI policy.
The tension between automation and relationships remains central in the independent channel. For Connors, the path forward is designing AI use around tasks that don’t require human connection, while keeping people accountable for judgment and client outcomes. This includes using AI to surface context before a client conversation, improving personalization rather than replacing it.
“By leveraging systems, you can be a better customer service representative if you have a tool that provides all that intake or gives you an AI summary – this client has five kids, and so on – to remind you,” she told Insurance Business.
“Taking time on the things that matter and leveraging AI to free up time allows them to focus on the key areas around relationships, rather than on things that are just taking up a lot of time.”
Connors expects AI adoption to become a competitive differentiator, particularly as agencies compete on responsiveness and proactive service. But she also warned against a “do everything at once” mindset, especially for smaller firms watching tech-forward competitors.
“Your agency down the street might be doing x, y, z, and it feels like you have to implement everything at once,” Connors said. “But it's really about taking that step back, looking at your processes, looking at where your bottlenecks and friction points are, and solving one thing at a time.”
