By Max Dorfman, Investigative Writer, Triple-I

Insurance agencies that adopt digital methods to interact with customers have seen their revenue grow faster than their less digitally sophisticated competitors, according to new research by Liberty Mutual and Safeco Insurance. However, the research also indicates that digital adoption by agencies has slowed in recent years.

The study, The state of digital in independent insurance agenciesfound that “high digital adoption” agencies (based on a 10-point scale related to the number and complexity of tools the agency uses) experienced a 70% growth rate, compared to 17% for ” high digital adopters”, and a mere 10 percent for “low” and “medium” digital adopters.

But while digital adoption has gained momentum, it has declined as a priority in agencies’ plans. At the end of 2020, 58 percent of agencies said improving digital capabilities was part of their five-year growth plans, according to the Liberty Mutual/Safeco study. However, by the end of 2021, this had decreased to 47 percent, about the same as in 2017.

Digital tools that have seen a decline in usage range from social media to live online chats. Also, many agencies said they are not tracking which digital tools are driving growth.

The survey found that 60 percent of digitally focused agencies said they planned to invest in new digital capabilities within their five-year agency growth plans. Only 42 percent of slow and steady growth agencies said the same. Growth-focused agencies have used various tools to increase their reach and revenue. Self-service portals, video calls, live online chats, video quotes, and policy reviews have driven significant improvements among these agencies.

These, however, are not the only tools being recommended and used. Artificial intelligence, machine learning, the Internet of Things, and big data analytics are all being considered and used to increase engagement with current and potential customers.

Cybercrime can be a factor hindering the growth of digital adoption. In fact, the global costs of cybercrime are projected to reach $10.5 trillion annually by 2025, according to Cybersecurity Ventures. Besides, more than half of all consumers have experienced cybercrime at some point, according to a 2021 survey by Norton.

Agents stay alert to cyber threats. The Liberty Mutual/Safeco study found that 57 percent of respondents anticipated that cyber liability would have a major impact on their agencies by 2025, up from 46 percent in 2017.

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