Highly-digital insurance agencies grew 70% faster than counterparts

Liberty Mutual and Safeco Insurance released The State of Digital in Independent Insurance Agencies, which highlights how digitization is necessary to stay relevant, but most agencies have slowed adoption of digital tools since 2020.

The report includes survey responses from more than 730 independent agents. The research divides agencies into three categories–low, medium and high digital adopters based on the number of digital tools the agency uses.

“The digital habits consumers adopted during the pandemic are here to stay,” the report noted. “Our research found that highly digital agencies grow, on average, 70% faster than other agencies.”

Tyler Asher, president of independent agent distribution at Liberty Mutual and Safeco Insurance said in the report that investing in digital is an investment in the future.

“Digital can create business efficiencies, improve customer satisfaction, and–as this research shows–benefit the bottom line. As agencies look ahead to 2023 and consider how a potential economic downturn may impact business, digital can and should be at the forefront,” he said in the report.

For many respondents, digital tool use stayed about the same between 2020 and 2021, for example email and e-signature options are used by more than 90% of agencies and 80% have texting options and online quoting, according to the results. Agency self-service portals and voice over IP are used by about half of agencies.

“Growth-focused agencies are more likely to be high digital adopters and invest in digital tools alongside other growth tactics,” the report noted. “60% of growth-focused agencies said they planned to invest in new digital capabilities, as opposed to 42% of slow and steady growth agencies.”

The top five revenue-driving digital capabilities include online quoting, self-service portals, live online chat options, call tracking and Google ads.

As more interactions take place online there is an increased concern related to cybersecurity challenges. The research shows that 57% of respondents predict cyber liability will have a major impact on agencies by 2025, up from 46% in 2017.

“Customer expectations for digital are higher than ever,” the report stated. “And while the pace of digital adoption in agencies has slowed overall, agencies that want to continue to grow are investing in digital along with other growth tactics.”