Another Look at Liberty Mutual’s 2026 Independent Agency Growth Study

Weekly Industry News did its first story on Liberty Mutual’s 2026 Independent Agency Growth Study last week. It covered agents, agencies and AI use. Next week we will do a third and final story.

Liberty Mutual surveyed 1,149 agency principals and staff. Questions were based around these issues:

• Client retention in insurance agencies

• How insurance customer expectations are changing

• Client acquisition in agencies

• AI adoption in insurance agencies

• AI use cases in agencies

• The growing roles of women in agency leadership

This year’s study looked at agents, agencies and staff focused on retention. It found those improving retention rates took a proactive, and structured, approach to retention.

• 98% of agents say retention is very important to success this year

• 85% is the average agency retention rate in 2026

• 40% of agencies are retaining close to the same rate as last year

• 18% of agencies are retaining 5% more than a year ago

These are the processes driving retention increases. Agencies with retention improved, or improving, are more likely to have formal process for the following:

Proactively reviewing policy coverages and insurance needs

• Improved retention: 73%

• Not reviewing coverages and needs saw declining retention: 63%

Helping customers better understand policies and coverage

• Improved retention: 60%

• Not helping better understand their needs ended with Flat, or declining numbers: 49%

Educating on the changing dynamics of the insurance market

• Saw improved retention: 45%

• No education — or very little — led to flat, or declining, retention: 35%

Offering advice on protecting access and/or risk mitigation

• Improved retention: 32%

• Led to flat, or declining, retention: 23%

Recognizing customers for their loyalty

• Improved retention: 20%

• Not doing so led to flat, or declining, retention: 13%

The survey also noted Improved retention starts with communication. Communicating with clients more often, and discussing topics that are more relevant to them, led to these results:

• 40% found better retention tied to better communication

• 32% of agencies with improving retention talk with clients at least monthly

• 24% of agencies with flat, or declining, retention did not communicate well

• Compared to 5 years ago, 95% of those with higher retention rates are more likely to talk about complex topics

When it comes to AI and retention:

• 52% saw improved retention and view AI as an opportunity

• 43% of agencies with flat, or falling retention do not see AI as an opportunity

• 51% of agencies with improved retention saved considerable time using AI

• This compares to 35% of agencies with flat or declining retention

Agencies with high retention rates are more likely to give back to their communities:

• 75% with high overall retention (95% or higher) donate to causes in their local communities

• 65% of agencies with low retention (70% or lower), do not

• 47% of high-retention agencies donate staff service or volunteer hours in their local communities vs. 34% of low-retention agencies

Source link: Liberty Mutual — https://bit.ly/4cVLNj1