“My daughter passed away on a Monday, and I was back at work eight days later the following Tuesday because I had to be,” McBride recalls. After some time had passed, the family’s insurance agent called and asked them to come into the office for a discussion about life insurance. 

The conversation turned out to be transformational and inspiring. He gained a “true understanding of risk and solutions for risk, so if something were to happen again, we’d have the capacity to grieve and mourn,” McBride says. “I walked out of that meeting and told Misty, ‘I would never do anything else except for what I am doing now … or be an insurance agent.’” 

“When my daughter passed away, my insurance agent called me with a solution that helped me have some peace of mind—those are real conversations that people need to have,” he says.

It took a couple years, but McBride began training as an agent with captive carriers. While those opportunities gave him several years of experience, culminating in owning a captive agency, “it wasn’t a good fit and we lost a lot of money,” McBride says. “I felt like if I was going to go bankrupt, I could at least have my own name on the door.”

The McBride Agency, based in Dixon, Illinois, opened as an independent agency in early 2022 with Patrick McBride as agency owner and Misty McBride as operations manager and the business has grown despite the hard market hitting the industry full-force when the agency was a few months old. “Everyone else was losing business, but we didn’t have the business to lose,” McBride says. “We’re a growth-minded team.”

As the consumer mindset shifted from the pandemic to the hard market, “we have seen more of a shift toward the personal connection,” McBride says. “With the pandemic, we had a huge lack of human connection. It drove the ability for us to function in a digital world though, and while we see people in person less, we connect at a deeper level. Our intake and renewal processes are designed on that.” 

From the long-lasting impact of the pandemic to the turmoil of the hard market, personal lines consumer preferences are shifting. Here’s how independent agents can keep up with technology, communication and customer service. 

Gone Shopping 

In 2024, personal auto insurance rates increased by 15%, with the average American driver paying $2,313 annually for full coverage, according to a report from Insurify. Homeowners premiums weren’t far behind, with an average rate increase of 10% in 2024, according to S&P Global, which followed a nearly 13% rise in 2023. 

While skyrocketing prices prompted record amounts of both homeowners and personal auto policy shopping—homeowners shopping climbed to 6.3% in the second quarter of 2024 and auto shopping hit 13.2% in the third quarter, according to J.D. Power—rate increases across the board meant that few customers moved. 

“Perhaps if a consumer shopped very early in the hard market, they could find an insurer that hadn’t increased premiums yet, but one or two renewal cycles later, everybody was hiking rates and no one could find a lower premium,” explains Stephen Crewdson, senior director of insurance business intelligence at J.D. Power. 

Instead, many consumers shifted to optimizing coverage and preventing claims. “Some consumers are looking at higher deductible options, alternative coverages. They’re getting smarter about insurance and digging deeper into the insurance product,” says Rohit Makhijani, principal analyst at Forrester. “There is a silver lining to this because it means education among consumers is increasing.” 

While many insureds are willing to be creative, unfortunately, the increase in premiums has also led to the amount of uninsured and underinsured households continuing to rise. In fact, a Trusted Choice® survey from 2023 found that 22% of Americans have considered going uninsured to save money.

Meanwhile, a recent Forrester survey asked insurance consumers what they would do if their insurance premium went up by 10%. Five percent of respondents said they would remove drivers from their auto policy, and another 5% said they would let their policy lapse at the expiration date. 

“This is a drastic response to a 10% increase in premium, and keep in mind certain segments of the market have seen insurance premiums go up by 50%-70%,” Makhijani says. 

However, 2025 shows signs of the beginning of the end of the hard market, with the insurance industry expected to see premium growth, positive underwriting results over 2025 and 2026 and an improved personal lines net combined ratio, according to a January report from the Insurance Information Institute (Triple-I) and Milliman. 

“We started to see shifting trends in auto insurance mid-year, as collision numbers have shown positive development,” says Casey Kempton, president of property & casualty lines at Nationwide. “We believe safety features are having an impact. We also had been seeing the cost of repairs increase independently of inflation, depending on the models, and as claim frequency is starting to reduce, auto rates will be coming down. We anticipate a bit of a softer market on auto insurance in 2025.”

An easing of rates may mean more consumers are successful in their shopping efforts. “That pent-up demand over the last few years is being met with a market where some shoppers can find a lower premium and switch,” Crewdson says. 

However, the homeowners market may need to wait a little longer to soften, with constraints in areas with “weather-driven loss activity and, in general, inflation is still making its way through the homeowners market,” Kempton says. While the pandemic brought a boom in home sales—6.1 million existing homes sold in 2021, the highest since the pre-Great Recession buying spree of 6.5 million in 2006—2024 was the slowest year for existing home sales since 1995, at only 4.06 million.

As the personal lines P&C market unfolds throughout the rest of the year, Forrester predicts a growing heterogeneity in customer segments. “There is a realization that risks are not homogenous, and there’s greater sophistication that’s powering that realization,” Makhijani says. “For certain segments, the quick, cheap coverage does the trick, but for others, there is significant opportunity for personalized prevention, resilience and solutions.”

Education Conversation

Historically, personal lines customers in catastrophe-prone areas have had a greater awareness of insurance price drivers and loss prevention compared to customers in non-catastrophe-prone areas. However, public awareness of insurance and damage mitigation is spreading. “The conversation is shifting to where homeowners can engage in technology or rebuild solutions that improve both the inside and exterior quality of their home,” Kempton says.

Angie Demmig, personal lines operations lead, Northwest region, at Acrisure, has found that hard market challenges and more stringent underwriting requirements produced more in-depth conversations with customers about “what that means, why that’s in place and what changes they should make in the market,” she says. “They’ve wanted more information, and our agents are educated and up-to-date on these factors.”

Acrisure has a library of materials and webinars that it offers to clients. “We also have automated educational communications that are delivered to customers on a regular basis,” Demmig says.

This presents “a huge opportunity for independent insurance agencies to lead with education,” says Monika Baraket, vice president of operations at Agency Revolution. “Educate the consumer on what’s happening, why it’s happening, how that impacts them, and how the agency is there to help them.” 

While McBride has seen more curiosity on loss prevention from commercial lines clients, “for our personal lines clients who come to us for remarketing, we ask when their roof was replaced, and we ask them specific questions to prepare for an inspection—because there is an inspection on the vast majority of our new business,” he says. “We also have conversations around deductibles. If you are not going to file a claim for anything less than $5,000, why are you paying for a $1,000 deductible?”

Most Americans do not fully understand their insurance coverages, despite 86% believing that they do, according to a 2024 survey from Trusted Choice. Key coverage misconceptions include 56% of Americans not knowing that a standard homeowners policy doesn’t cover flood damage, or 70% being unaware that a homeowners policy does not cover materials or fixtures that are installed during renovations.

Proactive communication is key to combatting the lack of insurance education among personal lines consumers, McBride says. “Every piece of information a consumer sees paints insurance in a bad light, or every carrier advertisement is saying, ‘Switch to us, we’ll save you money.’ But maybe savings isn’t what they should be looking for,” he says. “Maybe they need better coverage or better definitions or less exclusions. It’s about taking a real solution to a real risk.”

Chris Kannel, owner and agent at Kannel Insurance in Montpelier, Ohio, has found that there is a general lack of awareness about why the hard market is occurring. “In the Midwest, there’s a perception that the cost of insurance is the result of wildfires, hurricanes and things that happen in other places, and our Midwest customers don’t feel like they need to do anything because it’s somebody else’s fault,” he says.

“But we are seeing historically high claims costs from our regional carriers,” Kannel continues. “A lot of our Midwest risks are weather-related. We’re trying to thwart the perception that high insurance costs are the result of things happening in other places.” 

The Amazon Effect

The Amazon effect—the consumer expectation of a fast, digital experience for any purchasing experience—existed before the pandemic but was sent into overdrive by the sudden need to take everything online. “Consumers have increased their level of sophistication around the use of digital technology and the expectation of a certain caliber of service they get through digital technology,” Makhijani says. “And they expect that from the insurance value chain as well.” 

During the pandemic, “even though legislation occurred that allowed agencies’ brick-and-mortar locations to be open, many people preferred to be online,” says Jason Walker, president of Agency Revolution. And as the hard market sank in, “we’ve not seen a drop in that digital interaction post-pandemic—it seems to only continue to climb, even while being paired with going in and meeting with your agency.”

Kannel Insurance, based in rural Ohio, has seen “an enormous increase in digital interaction,” Kannel says. “And with everybody now being accustomed to Amazon Prime, if we don’t respond to an inquiry within two hours, we’ll get a phone call, ‘Hey, is this ready yet?’” 

How are the two seemingly disparate trends—Amazonification and personalized guidance—coming together? 

“Customers really need an agent to guide them through their insurance purchasing process. It’s a big decision, and there’s a lot of ramifications if you get it wrong. I don’t anticipate that changing,” says Michael Streit, president of EZLynx. “What has changed is customers want to be met where they are. The conversation is similar. It just needs to happen in a variety of places and ways.” 

“You have to look at it like a hybrid model,” says Casey Preston, regional vice president, insurance, Experience.com. “Drive with digital first, but create the opportunity to connect a personal level with your customer.”

The word McBride uses is “omnichannel,” ensuring that consumers have every possible venue to contact the agency—whether the situation calls for a couple of clicks or a phone call. “You can go to my website, you can log in to the portal, you can download our mobile app, you can text us, you can email us, and our systems will automatically create a ticket—or you can simply pick up the phone and we answer it in six seconds or less,” McBride says. 

An omnichannel approach is critical, Demmig agrees. “A lot more people are using our chat feature, and they want immediate responses, but it’s still similar to how it used to be in that, when it comes to coverages, people want to talk it through,” she says. “We have to understand that we need to provide the digital resources for the ones who want to transact business that way, but also provide that service for those who want to talk it through.”

When consumers need to contact a human, agencies can also leverage technology to enable those interactions to be all the more human. McBride Agency implements quoting technology to allow for “less interrogation on the front end for new business sales,” McBride says. “We’re not trying to cut quoting time in half. We just want to spend more time talking about them and their family and connecting at a human level while technology does its job.”

“We’re trying to build 30 minutes of relationship, instead of 30 minutes of interrogation,” he adds. 

Agencies can also take full advantage of automation to deliver proactive education, which—surprise, surprise—has also been touched by expectations of speedy digitization. “Consumers expect that they should have immediate access to education on the market and its impact on their insurance,” Walker says. “Automating that can help reduce some of the pressure on the service and operating teams at an agency.”

Using generative artificial intelligence (AI) to scale communication is the bridge to meet customer expectations while funneling them toward the highly personalized approach of engaging with your client base. 

“AI can expedite a lot of the first-draft work of blog content and email campaigns,” Walker says. “Don’t expose yourself to risks—read and edit everything—but it can help you gain time back in your week.”

Scaled, automated content feels very personalized to a customer, “and then the agent can pick it right up when they need to insert themselves for person-to-person touchpoints,” he says. 

Call Me Maybe

Yet, the question remains: When do consumers want digitized communication, and when do they want to talk to a human? 

For simple transactions like payments, proof of insurance and updating contact information, “consumers prefer to contact their insurer through a self-service digital channel,” Crewdson says. And for proactive communication from the agency to the client on resilience and prevention, “the preference is still email and digital channels,” Makhijani says.

“But when a customer has a question, their first thought is not a chatbot—they’re picking up the phone,” Makhijani says. 

McBride Agency gets 50-60 calls on any given day, and it monitors the amount of abandoned calls, which are calls that go unanswered. “Between 94% and 96% of calls are answered by a real person in less than six seconds,” McBride says. “The report of abandoned calls from the day prior goes out to our team every morning.”

While McBride knows he can deploy an AI tool to automatically answer the phone and get that answered phone call percentage to 100%, he chooses to keep phone calls human-only interactions. “I think people gravitate toward someone real answering the phone,” he says. “I get more comments about that than you can even begin to imagine—people appreciate it.”

Instead, McBride saves time in other areas, such as by choosing a vendor that provides a mobile app and client website portal that syncs with the agency management system (AMS). “It makes it easy for our team and easy for our clients,” he says. “When people call, we ask about their experience with the mobile app. Not to force them, but to remind them and see if they had any trouble with it.”

So when do consumers want to be contacted directly by their agent? “Our data shows that if a policy premium were to go up, consumers want the agent to personally call them and have a conversation about how to mitigate the premium increase, whether it’s changing coverages, changing deductibles or signing up for usage-based insurance,” Crewdson says. 

While it may be nerve-wracking to call an insured with bad news, “if you’re not calling them just to tell them price is going up but can have that advisory conversation about actions to take, you can end up with a customer who is just as satisfied as the customer who had no increase in premium at all,” Crewdson says. 

“Agents that are taking that proactive approach move their customer from saying, ‘my agent blindsided me with a 20% increase’ to ‘my agent got in front of it and did the work for me,’” Streit agrees. “It becomes a virtuous cycle for the agent.”

The trick is getting the insured to answer their phone. While nearly 80% of consumers believe phone calls are important for communicating with businesses, 80% will also block calls from numbers they don’t know, according to TransUnion. Consumers cite concern about rampant fraud and scam calls, with 70% not answering a phone call due to safety concerns and later learning a legitimate number was trying to reach them. 

Three-quarters of consumers said branded calls would improve the customer experience when they are expecting a call from a particular business. Nearly the same amount (73%) said they would be more likely to answer calls—and view the company more favorably—if a business displayed its name and logo on calls. 

At Your Service 

The hard market has caused an increase in inquiries from clients to review existing policies, Walker says, which “results in more service activity.” As a result, more than half (55%) of agencies say they have placed more focus on customer experience than in the past, according to the 2024 Agency Universe Study. 

Three-quarters (74%) of personal lines agencies prefer to administer routine customer service rather than carriers, according to the Agency Universe Study. However, meeting the demand for service created by the hard market can stretch agency staff—and morale—to the limit. “We have heard about increased turnover rates, especially affecting the operations and service side of agencies as they get more and more questions,” Walker says. “There is some burnout taking place.”

Claims in particular are a sticking point. Between 2021-2024, customer complaints regarding homeowners hazard coverage have seen a 4,867% increase, according to a ValuePenguin study. Auto physical damage coverage has seen a 164% increase. Generally, claims handling is the most common insurance complaint, at 65% of all closed complaints.

Many of those claim issues are ending up in agencies’ laps and Kannel has noticed a significant increase in the phone calls his agency receives about claims. “The claims process has become a lot more complicated in the last five years, and as insurance companies and adjustors become more heavily loaded, they’re not taking as much time to explain the claims process as they used to,” he says. “I just spent 20 minutes on the phone with a customer for a very simple auto claim.”

“We end up doing the sales, the underwriting, the re-underwriting, customer service and claims,” Kannel says. “Meanwhile, our commissions are reduced pretty consistently. It’s hard on my staff. I don’t think anybody at an insurance company is saying, ‘Hey, how can we make agencies more involved in claims?’ It’s just a function of everybody tightening their belts.”

To respond, Kannel Insurance, which has three people on staff, is “becoming more specialized, with one person primarily responsible for claims,” Kannel says, and “we are continuously improving our use of technology to be more efficient.” 

The agency has invested in a phone system with a text messaging system, which is “just one example that has definitely streamlined our processes,” Kannel says. He’s in good company, as 69% of agencies texted with clients in 2024, up from 65% in 2022, according to the 2024 Agency Universe Study. It’s a good move, given that 80% of consumers prefer texting with their insurance agents, believing it fosters closer bonds, according to a survey by communication platform Hi Marley. 

With service and claims becoming more digitalized and automated, “we need to demonstrate that we are the insurance experts for our customers,” Kannel says. “We need to be the ones laying out the possibilities in advance, so that when something comes up, customers can call and say, ‘Hey, Chris, you told me this might happen. How is it going to work?’”

It’s paid off for Kannel Insurance. “There are always people who will just move coverage to save $50, but a large majority of our customers are staying with us because they appreciate our proactiveness,” Kannel adds. “We are experiencing the same retention rates we had pre-pandemic, even those in the mid ’90s.” 

AnneMarie McPherson Spears is IA news editor.