Agents vs. Algorithms? Why AI still needs human advisors in insurance

Artificial intelligence, or 'AI,' has become a leading buzzword in the insurance industry, but not all insurance companies are feeling the pressure or buying into the hype.

According to Tanner Hackett, founder and CEO of Los Angeles-based MGU Counterpart, appetite for AI in insurance varies heavily, and actual adoption rates may lag behind reported interest.

“Appetite for AI tools within the industry varies. Forward-thinking brokers are seeking AI tools to differentiate themselves and deliver faster quotes and better risk assessments. That said, pressure to use AI is mounting. What started as a competitive advantage is quickly becoming a necessity,” Hackett said.

Many industry leaders would agree. Companies like Mylo and Embroker suggest AI is not just a trendy new fad but an innovative way to modernize and improve service.

But Michael Silverman, president and CEO of New York’s Silver Lining Insurance, holds a different view. He maintains that while AI has benefits, insurance is and always will be a people-centered industry first and foremost.

“Purchasing insurance is personal, whether it’s for your business or your family or anything else. It is personal, it is emotional, and I haven’t found an AI product or a robot or a system that really gets to that,” Silverman said.

What’s driving AI adoption?

A combination of competitive pressure, client expectation and operational necessity is increasing adoption of AI among American insurers, Hackett suggests.

“SMBs expect the same digital experience they can get elsewhere. When we can deliver competitive pricing two to five times faster through Agentic Underwriting, it’s clear that AI is becoming essential to stay competitive,” he said.

He noted that while most insurers have incorporated some form of digital strategy, many still seem to be in an exploratory phase rather than embracing full implementation. In his view, this “lack of urgency and unwillingness to adapt” hurts both insurance businesses and the clients they protect.

“There’s a clear divide in how insurers are responding. Some are investing heavily in data infrastructure and seeing real ROI, while others dismiss AI as hype and find themselves at a competitive disadvantage… Without embracing digitization, carriers risk being left behind,” Hackett said.

AI is more than just hype

While pressures may force the hand of some American insurers, others say they are more motivated by the benefits AI can bring.

“We’ve never made technology decisions purely because we’ve felt pressured to do so. Our decisions have always been based on figuring out the most effective way to meet the needs of underserved customers — individuals and small business owners,” Belen Tokarski, president and COO, Mylo, said.

As her company approaches its 10th anniversary, Tokarski said it’s currently exploring use cases for Gen AI to help improve customer service even further.

Andy Lea, CIO, Embroker, likewise said his company isn’t embracing AI simply because “everyone else is or we’re feeling the pressure,” but rather identifying where it benefits customers and improves workflows.

“AI delivers dramatic improvements in both efficiency and accuracy for underwriting processes. The business impact extends far beyond operational improvements; AI enables significantly faster customer quotes, creating a genuine competitive advantage while enhancing the overall experience for businesses,” Lea said.

Resisting the pressure

On the other hand, Silverman uses AI for some limited aspects of his business, but said his firm doesn’t let the hype change his operations because most customers still want to connect with human insurance experts.

“I’m still talking to people, human to human. I’m having these conversations as not only their insurance representative and their advisor, but as a husband, as a business owner, as a father, as a human being who also pays his premiums,” Silverman said.

He emphasized that this approach doesn’t mean “AI and everything that goes with it is wrong or isn’t going to work,” but rather that it cannot replace human connection.

Centering human expertise

Most industry leaders seem to agree when it comes to placing high value on human expertise alongside advanced AI technology in insurance.

“It’s much better, in my opinion, to have conversations in the human world. We can get service stuff done in the AI world,” Silverman said.

“In our experience, most people consider insurance an important decision and prefer getting the assurance they’ve made the right call from a human expert. We’ve been struck by how many customers choose, at the last minute, to talk with an agent before hitting ‘purchase,’” Tokarski added.

“No company wants to fall behind technologically, yet we’re simultaneously committed to preserving the value of human judgment in our processes. It’s all about striving for a balance where AI can enhance our capabilities without replacing critical human insights and expertise,” Lea said.

“Human agents have the expertise needed to make AI as powerful as possible in insurance. AI doesn’t replace human expertise; it amplifies it… It’s a powerful tool to identify the new exposures emerging and equip human agents to take action,” Hackett noted.

Counterpart is a management and professional liability managing general underwriter founded in 2019 and based out of Los Angeles, CA. It takes a technology-forward approach to supporting stakeholders in the insurance industry.

Silver Lining Insurance is a multiline insurance agency based in New York City. It represents carriers across the United States.

Embroker Insurance Services LLC is a digital insurance brokerage founded in 2015 and based out of San Francisco. It specializes in business insurance policies.

Mylo Insurance Solutions is an insurtech company founded in 2015 and based out of Kansas City, MO. It offers embedded insurance solutions digitally.

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Rayne Morgan is a journalist, copywriter, and editor with over 10 years' combined experience in digital content and print media. You can reach her at [email protected].