Zywave, a technology company providing software and data-driven solutions for the insurance distribution sector, has released a new report exploring how artificial intelligence (AI) could reshape the US insurance market.
Titled The Broker of the Future, the study estimates that AI could create more than USD $100 billion in annual value for insurers and brokers within the next five to seven years. According to Zywave, this potential growth is linked to changes in underwriting, policy selection, risk assessment and the delivery of insurance services, rather than the wholesale replacement of brokers by automated systems.
Drawing on employment data, commission models and technology adoption trends, Zywave’s report examines how AI could alter the responsibilities of insurance professionals and the operating models of brokerage firms.
The company maintains that human expertise will continue to play an important role, particularly when interpreting clients’ circumstances, identifying less obvious exposures and recommending suitable insurance protection. Zywave also notes that the absence of insurers underwriting AI-related errors at the point a policy is bound reinforces the need for qualified professionals to retain oversight of important decisions.
The report identifies recruitment and retirement as further pressures on the insurance sector. According to estimates cited by Zywave from the US Bureau of Labor Statistics, around 400,000 insurance professionals will have retired between 2021 and the end of 2026. The company highlights concerns that the number of new entrants may not be sufficient to replace the knowledge and practical experience leaving the workforce.
Alongside these staffing challenges, Zywave’s research points to a substantial difference in revenue generation between traditional agencies and businesses built around AI-enabled processes. The report estimates that conventional insurance agencies generate approximately USD $175,000 in revenue per employee, while AI-native brokerages could achieve figures approaching USD $1 million per employee.
Zywave attributes this potential productivity gap to the ability of technology-led businesses to expand their operations and service capacity without increasing their workforce at a comparable rate. The company presents this as an opportunity to support business growth, rather than simply reduce staffing levels.
“Every carrier and broker executive we talk to has asked some version of the same question: is AI coming for the broker’s seat at the table?” commented Martin Simoncic, Chief Executive Officer at Zywave. “The answer is no, but that’s far from permission to stand still. The data is unambiguous: the brokers and carriers who invest to unlock the value in their own data, fix the foundation underneath it, and put AI to work on the paperwork rather than the judgment are already operating at a different level of economics than everyone else.”
Zywave’s analysis estimates that the financial benefits of AI could emerge across four main areas of insurance distribution. The use of live data to support continuous underwriting could account for USD $10 billion to USD $20 billion in annual value, according to the report.
Automating administrative work through software and AI could contribute a further USD $30 billion to USD $40 billion, while improved risk assessment, portfolio selection and fraud detection could generate between USD $20 billion and USD $30 billion. The company also identifies opportunities in insurance products designed to cover emerging AI-related risks, estimating the potential annual value of this market at USD $15 billion to USD $20 billion.
The report suggests that these developments could affect brokerage businesses differently depending on their size, specialisation and readiness to adopt new technology. Zywave identifies larger national and regional brokerages as potential beneficiaries of their ability to attract experienced staff and consolidate premium volumes.
Smaller and medium-sized agencies, meanwhile, could face greater pressure to invest in technology or consider acquisition opportunities. Specialist brokerages may also be well positioned to compete by developing expertise in defined market segments and building services around specific client needs.
According to Zywave, the ability to organise and improve internal data systems will be an important consideration for businesses seeking to benefit from AI. The company argues that investment in AI alone may not deliver the expected results without reliable underlying data and appropriate operational processes. Its report therefore places data preparation and infrastructure alongside technology adoption as factors that could influence firms’ competitiveness.
“The carriers and brokers positioned to win aren’t necessarily the ones spending the most on AI, they’re the ones who invest to get their own data in order first,” added Eric Rentsch, Chief Product Officer and Head of Emerging Markets at Zywave. “Every archetype in this study, whether you’re scaling, specialising, or deciding whether to sell, wins or loses on that same foundation. The Broker of the Future research provides a clear roadmap for how the industry can capitalise on the sizeable opportunity ahead.”
