How Does Your Independent Insurance Agency’s Tech Stack Stack Up? 

Big I state associations, in partnership with Catalyit, surveyed 469 independent insurance agencies to learn what type of technology each one uses.

The April 2023 report from Catalyit is out, and it begins with the proclamation that “Your business has a tech stack.” And it’s true. Regardless of whether you’re keeping up with modern times or your tech stack is a spreadsheet, we know you use something. At the very least, you’re using a web browser to read our blog right now. 

An independent agency tech stack can vary from just the essentials (like web browsing, word processing, spreadsheets, and PDFs) to the highly automated and complex. If you’re wondering what’s going on across the industry, we’re going to recap some of the highlights from the 2023 Big I and Catalyit survey. 

Who participated in the Catalyit agency Tech Stack Survey?

Catalyit’s 2023 Tech Stack Survey includes responses from 469 independent agencies across 25 different U.S. states. These agencies range in size from just one employee to over 100, and from less than $500,000 in annual revenue to over $5 million.

In terms of the distribution of responses, 36 percent of respondents came from agencies with one to five employees. Responses from the smallest of agencies were more prevalent than from ones with more employees. Agencies with between 51 and 100 employees and those with over 100 employees represent only 2 percent and 11 percent of responses, respectively. Looking at agencies by revenue instead of employee size, the most responses (22 percent) came from those agencies reporting over $5 million in annual revenue.   

The average number of tech platforms used by independent insurance agencies

Not surprisingly, the average number of tech solutions any given insurance agency has in its tech stack went up as the company’s revenue increased. Agencies that reported revenue of less than $500,000 on average used around six pieces of technology. For the largest agencies in this survey, those with over $5 million in revenue, this number nearly doubled to an average of 11.7. 

These averages increased at a fairly steady rate as agency revenue increased, with the largest jump in the number of tech solutions happening between those agencies whose revenue fell between $3-5 million and those bringing in over $5 million. 

The biggest challenges for new technology at insurance agencies 

Across every size of agency, the tasks of finding the right tool and implementing the chosen solution pale in comparison to the challenges related to “getting the most out of the tool.” This means utilization, adoption, and optimization are much bigger challenges than just shopping for and purchasing a new technology. 

Digging more deeply into this section of the survey’s findings, it’s important to note that for agencies with less than $500,000 in revenue, “finding the right tool” was also a significant challenge compared to how larger agencies felt about that step of the process. This could signify a lack of awareness and education efforts from technology providers aimed at lower-revenue-generating independent agencies. 

Agency management systems (AMS) are nearly universal 

Based on the responses of 465 independent agencies, 95 percent report using an agency management system, regardless of which vendor. A handful of survey respondents apparently didn’t respond to this question, however, the report states that 5 percent of respondents didn’t use an agency management system at all (regardless of those non-responders). 

What else is in insurance agencies’ tech stacks?

From accounting to websites, insurance agencies have plenty of options for their tech stacks. While independent insurance agencies nearly universally use agency management systems regardless of agency size, the same isn’t true for a variety of other tech solutions. 

The Catalyit survey touches on 25 other types of insurance (and non-insurance) technology solutions and systems that agencies may or may not have. 

These include: 

• Insurance accounting platforms: used by 44 percent of agencies
• Insurance license compliance management systems: used by 16 percent of agencies
• Benefits quoting and management systems: used by 11 percent of agencies
• Carrier submissions management systems: used by 19 percent of agencies
• Chatbots: used by 6 percent of agencies
• Contact relationship management or customer relationship management (CRM) software: used by 24 percent of agencies
• Cyber security platform or vendor: used by 41 percent of agencies
• Data and analytics: used by 19 percent of agencies
• Digital payments: used by 41 percent of agencies
• Electronic signatures: used by 80 percent of agencies
• IT or managed service provider: used by 44 percent of agencies 
• Lead-generation platform or service: used by 13 percent of agencies
• Marketing automation: used by 31 percent of agencies
• Mobile app: used by 22 percent of agencies
• Virtual assistants: used by 18 percent of agencies 
• Password management: used by 35 percent of agencies
• Phone systems: used by 75 percent of agencies
• Quoting or rating platform for commercial lines: used by 26 percent of agencies
• Quoting or rating platform for personal lines: used by 63 percent of agencies
• Reputation management: used by 16 percent of agencies
• Sales management: used by 17 percent of agencies
• Social media management: used by 20 percent of agencies
• Text messaging: used by 34 percent of agencies 
• Video conferencing: used by 34 percent of agencies
• Website development: used by 39 percent of agencies

What does it all mean? 

The insurance industry has a long way to go before independent agency tech stacks are on par with those in other industries. For example, studies indicate that across all industries, 91 percent of organizations with more than 11 employees have a CRM. This is compared to just 24 percent of independent insurance agencies (across employee sizes from one to over 100). 

Since agency management systems have been around since the 1960s, it’s no wonder they’ve been the first piece of technology to proliferate the industry. More recent developments like SMS/text messaging for marketing and chatbots are still playing catch-up in this traditionally slow-to-adopt industry. 

Just like most agencies today wouldn’t think of operating without their essential AMS, more and more pieces of technology are becoming non-negotiable parts of life at an independent agency. COVID-19 may very well be responsible for the current 34 percent of agencies that reportedly use video conferencing in 2023 when they didn’t just a few years ago. But, that’s still a far cry from market saturation. 

At the same time, most employees (particularly those of a certain generation) couldn’t imagine working for a company that didn’t use video conferencing to conduct business. The same holds true – or will very soon – for other types of insurance agency tasks that could be made quicker and easier with technology. 

Only 16 percent of agencies use licensing compliance management technology  

Among the lowest on the ladder of tech stack adoption is the license compliance management system. Maybe independent agencies still think managing producer compliance is something that’s done “good enough” by human hands. We happen to disagree! 

Whether an independent agency is managing producer compliance manually, or possibly not managing compliance much at all, both options result in slow and tedious work, a negative producer and employee experience, and leave room for human error. 

As a new generation of insurance professionals comes into the workforce, insurance agencies also grapple with rising costs and trying to reduce operational bloat. A modern license compliance management system can help save costs, reduce errors, improve compliance, and above all (in a world where only 16 percent of competing agencies have any tech solution at all) help your agency stand out with an impressively easy producer onboarding and license management process. 

Reduce costs. Attract the best talent. Keep your compliance employees happy. Make everyone’s job easier. If any of these appeal to your independent agency, see how AgentSync can help.