Despite challenges posed by inflation, market volatility and rapidly changing technologies, independent agents remain positive about their businesses and report more optimistic perceptions of national business conditions this year than they did last year.
That’s according to the recent Nationwide Economic Impact Survey Report: Independent Insurance Agents Findings report found that 62% of agents gave a positive rating to the current business conditions in the U.S. overall, up from 41% in 2023.
The outlook was very positive for individual businesses and agencies, with agents giving a 79% positive rating for 2024, up from 73% in 2023.
Overall, 65% of agents said they expect revenue to increase in the next six months, while only 10% expect a decrease.
Looking ahead, agents were “very/extremely concerned” about the impacts of inflation (63%), artificial intelligence (AI) technology (51%), and U.S. (49%) and global market volatility (50%). Forty-six percent cited concerns about a potential recession or economic downturn in the U.S., while high interest rates (45%) and the upcoming U.S. presidential election (45%) were also named top concerns.
For principal agents, inflation topped their list (31%); however, concerns about rising living costs were down 15% from 2023. Principal agents had increasing concerns about reaching new customers (29% cited, up 11% over 2023), taxes and government regulations (22% cited, up 10%) and financial market volatility (21%, up 7%).
As a result of these adverse conditions, many principal agents are looking for ways to reduce business expenses (53%). Some have applied for a personal loan (35%) or a business loan (34%) within the past six months. Additionally, most report delaying or deferring updating their business’s technologies (61%) and investing in their business’s processes (51%) over the past year.
Economic conditions are also impacting customer behavior. Agents report that rates are rising for 84% of customers, and 84% of agents have noticed an uptick in customers renegotiating their policies. Customers are changing coverage (81%), and 55% of agents have seen policy demand drop over the past six months.
To boost business and get ahead of looming challenges, nearly 40% of principal agents have invested in generative artificial intelligence and automation tools in the past six months to grow business and reduce expenses. About 62% of the independent agents (IA) polled said they had already invested in artificial intelligence technology for their business.
Insurance professionals are finding AI opportunities in customer service, underwriting, pricing and sales. According to Nationwide, the benefits are so prominent that an additional 41% of agents surveyed plan to adopt AI for their business in the next six months. More agents (77%) are considering using AI technology to help their clients, a 15-point jump from 2023.
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