What will the insurance agency business model look like 10-15 years from now?
Today, several key trends are already shaping the future of the industry, including the ongoing trend of agency consoli
ation, the relative ease of starting new businesses, a widenin
g generational and workforce age gap, and the rapid rise of insurtech and artificial intelligence.
The first three trends are steadily reshaping the traditional agency model, gradually evolving it into a more modern
structure. By contrast, insurtech and artificial intell
igence represent true disruptors–technologies with the potential not just to reshape but to transform ho
w insurance agencies operate and deliver value fundamentally.
Agency Consolidation
The first major trend shaping the industry is consolidation
. Agencies of all sizes are being acquired, primarily by well-capitalized private organizations backed by private equity and large publicly traded firms.
Private equity investment has surged into the insurance sector, now driving a vast majority of agency acquisitions. Recent reports indicate that approximately 7
50 reported acquisitions occurred in 2024, a decrease from more tha
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n 830 in 2023. However, unreported acquisitions may be of a similar amount, although this is difficult to assess.
This consolidation trend has been building momentum for years. One clear outcome is that professionally r
un agencies with national reach now manage an increasing share of insurance accounts. This shift aligns with evolving
consumer expectations, as many clients value access to firms with broad resources and extensive support networks.
For small, independent agencies, this environment presents both challenges and opportunities. To remain competitive against larger firms, i
ndependent agencies must emphasize personal relationships, specialized services, and unique value propositions. In many communities, the days of having multiple
small independent agencies are gone. Still, direct writers such as State Farm and Farmers continue to serve personal lines and small commercial markets, filling part of that gap.
New Agencies
In contrast to the consolidation trend, the second major development is that starting a new insurance agency has never been easier. The shift is primarily driven by expanded market access–opportunities that didn’t exist 50 years ago.
Today, entrepreneurs can launch a new agency and quickly access multiple carriers through aggregators and market access groups such as AmWins Access (formerly Networked Insurance Agents), Ironpeak (formerly Iroquois Group), United Valley, or Insuror’s Group. This model allows new agencies to be viable almost immediately.