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 consolidation, the relative ease of starting new businesses, a widening 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 intelligence represent true disruptors–technologies with the potential not just to reshape but to transform how 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 750 reported acquisitions occurred in 2024, a decrease from more than 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 run 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, independent 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.
In the past, startups had to place business through another established agency until they built enough premium volume–often $250,000 to $500,000–to qualify for direct contracts with carriers. That process could take years. Personal lines carriers are being very selective in contracting new agencies due to the current turmoil in that insurance segment, which makes it less likely to obtain a direct appointment.
Beyond aggregators, there are several other paths to support new or smaller agencies:
Clusters and Networks. These involve two or more agencies pooling resources to share carrier appointments, facilities, systems, staff, or services. These can be small clusters of 10 or fewer agencies, or large regional or national networks. Traditionally, this has been an option once an agency is somewhat established. There is also some overlap when defining an aggregator with a cluster or network, since the key feature is market access. However, a cluster or network will offer additional services, such as peer collaboration and marketing support. Large networks include Keystone, ISU, Renaissance, and SIAA, in addition to the aggregators listed above.