Research Report

2022 Agency Growth Study: The State of Digital in Independent Insurance Agencies

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In the last few years, the pace of digital adoption rapidly accelerated, pushed along by the impacts of the COVID-19 pandemic.

Digital ways of doing business are now a baseline expectation for most consumers.

Our previous digital research report, Rise of the Digital Insurance Agency, found that, during the pandemic, agencies were adopting more digital tools than ever before.

Since then, in-person activities have become safer, but the digital habits consumers adopted during the pandemic are here to stay. According to Salesforce’s 2022 State of the Connected Customer report, 61% of customer interactions with companies in 2022 happened online, compared to 42% in 2019. While some customers still prefer to engage in-person, digital-first customer engagement has become the norm.

However, as we’ll explore in this report, independent insurance agencies aren’t necessarily keeping up with the demand for digital. The use of digital capabilities in agencies varies widely, but the rate of adoption has slowed since the height of pandemic.

As the U.S. economy enters a difficult period, it’s essential for agencies to show their value as trusted advisors while also creating streamlined customer experiences. Digital is a key part of that. It can also be a helpful growth lever – our research found that highly digital agencies grow, on average, 70% faster than other agencies.

Rising consumer expectations for digital

of millennials and Gen Z customers prefer to engage through digital channels (Salesforce)
percent of our surveyed senior executive respondents agreed that the events of 2020/21 have rewired customers to be digital-first (Adobe)
of customers have used multiple channels to start and complete a transaction (Salesforce)
Tyler's Open Letter

When independent agents invest in digital, they are investing in the future of their business.

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. Now is the time for agencies to invest further and get more strategic about digital transformation to ensure the business is built for resilience.

Tyler Asher
president of independent agent distribution, Liberty Mutual and Safeco Insurance

The 2022 Agency Growth Study

In late 2021, the research team at Liberty Mutual and Safeco Insurance surveyed more than 730 independent insurance agents to learn about their strategies for growth, hiring, digital adoption and more.

This report, the third in a series drawn from the study, dives into emerging digital trends, how agencies are using digital tools and what the top agencies are doing.

It also serves as a follow-up to the Rise of the Digital Insurance Agency report, which was based on research conducted in late 2020. In this report, we’ll look at how digital adoption changed between 2020 and 2021.

Highly digital agencies grow faster

In both 2020 and 2021, highly digital agencies were growing faster than their less digital counterparts.

Our research divided agencies into three groups – low, medium and high digital adopters – based on the number of digital tools they used. About a third of agencies surveyed fell into each group in both 2020 and 2021, with slightly fewer high adopters and slightly more low adopters in 2021 than in 2020.

In 2020, low digital adopters grew revenue an average of 7.4% while high digital adopters grew an average of 12% – equating to a more than 60% higher annual growth rate for highly digital agencies.

In 2021, highly digital agencies outpaced their less digital counterparts by even more than they did in 2020. Year-over-year, low and medium digital adopters grew revenue an average of 10% while high digital adopters grew 17% – equating to a 70% higher growth rate.

Annual revenue growth of high digital adopters vs. low and medium adopters

High digital adopters
Low and medium digital adopters

Higher growth rate for highly digital agencies

Digital is a proven growth lever. Yet, many agencies are using fewer digital tools than they were in 2020.

Click through to the next page learn which tools declined in use, and keep reading to learn the five digital capabilities that drive revenue growth.