A recent report from First Connect looks at key trends across the US insurance market;
First Connect has released its 2026 State of the Industry Report, revealing significant year-over-year improvements in carrier-agent collaboration, including a 50% reduction in agents reporting major challenges receiving timely quotes and a 53% decline in challenges understanding carrier appetite. The findings suggest the industry’s next challenge is no longer access to technology, but adoption—turning existing capabilities into measurable operational improvements across carrier and agency workflows.
Based on responses from 238 independent insurance agencies and 44 carrier and MGA partners, the report shows meaningful year-over-year improvements in carrier responsiveness, appointment speed and appetite transparency. At the same time, agents report growing pressure to deliver faster, more digital and more personalized insurance experiences as direct-to-consumer competition intensifies.
First Connect is a rapidly growing insurance marketplace helping independent agencies compete more effectively in an increasingly complex market. The company connects agents with more than 150 insurance carriers and MGAs while streamlining onboarding, market access, appetite alignment, quoting workflows and carrier-agent collaboration through embedded digital tools and AI-powered capabilities.
The findings suggest the industry is approaching an operational tipping point where speed, responsiveness and access to real-time intelligence are becoming critical competitive differentiators.
Among the report’s key findings:
- Direct-to-consumer competition remained the single biggest factor impacting the agent distribution channel, rising from 37% to 43% year-over-year.
- Coverage availability as a significant agency challenge fell from 44% to 35%
- Significant appointment timing challenges fell from 31% to 18%
- Significant challenges receiving timely quotes fell by half year-over-year, from 22% in 2025 to 11% in 2026
- Significant challenges understanding carrier appetite declined from 17% to 8%
- Only 35% of agents currently use AI in day-to-day operations, despite 53% expressing optimism about AI’s impact on the insurance industry
- 75% of carriers said they do not use a third-party market intelligence provider to evaluate competitive positioning and market opportunities
“The friction that has defined the carrier-agent relationship for years is finally beginning to ease,” said Pinkovezky. “We’re seeing meaningful improvements in quote turnaround times, appetite transparency and appointment responsiveness. That’s encouraging because partnership is the unit of growth in this industry. While technology and workflow improvements are helping, a softening market is also reducing some of the pressure that has strained carrier-agent relationships in recent years. When agents and carriers are aligned, both sides spend less time managing friction and more time serving customers and growing their business.”
The Growing Pressure of Rising Expectations
The survey found that customer expectations for self-serve quoting, faster policy issuance, automated application prefill and policy customization all remained elevated or increased year-over-year, reinforcing the growing importance of digital workflows and operational efficiency across the distribution ecosystem.
At the same time, the competitive landscape continues to diversify. Independent agents, digital aggregators, embedded insurance providers and direct-to-consumer carriers are increasingly operating side-by-side, creating new pressure on carriers and agencies to improve responsiveness, visibility and customer experience across every channel.
The AI Adoption Paradox
Despite widespread optimism around AI, implementation remains measured. While 53% of respondents expressed optimism about AI’s long-term impact on insurance, only 35% of agencies reported using AI in day-to-day operations.
The findings suggest adoption is being shaped less by skepticism than by the industry’s need for accuracy, compliance and trust. Unlike many sectors where experimentation carries limited consequences, insurance workflows involve underwriting decisions, regulatory obligations and customer outcomes that leave little room for error.
As a result, many agencies appear to be taking a deliberate approach to adoption, focusing first on practical use cases that improve efficiency while maintaining human oversight.
“We’re entering what could be described as the fast-follower era for insurance technology,” said Pinkovezky. “The conversation is shifting from whether the industry should modernize to how quickly organizations can operationalize better intelligence, automation and digital experiences before those capabilities become baseline customer expectations.”
While carrier-agent relationships are improving operationally, the survey suggests many carriers still lack visibility into the broader market signals needed to drive future growth. Three-quarters of carriers reported they do not regularly use third-party intelligence to evaluate competitive positioning and market opportunities.
According to the report, many carriers remain heavily focused on measuring their own performance through metrics such as conversion rates, loss ratios and premium growth. While these indicators provide important insight into how a carrier is performing, they offer only a partial view of the market. They do not reveal where agents are placing business elsewhere, how competitive dynamics are shifting across distribution channels, or where new growth opportunities may be emerging.
As distribution channels become more fragmented and customer expectations continue to evolve, access to ecosystem-wide intelligence may become as important as traditional carrier-agent relationships. Carriers increasingly need visibility into emerging agency specializations, changing customer demand patterns, competitive market movements and the broader behaviors shaping insurance distribution.
“For years, the industry’s biggest challenge was friction,” said Pinkovezky. “Today, it’s visibility. Most carriers are measuring what is happening within their own book of business, but growth increasingly depends on understanding what is happening outside of it. You can be performing well in your own lane and still miss where the market is moving. The carriers that pull ahead will be the ones that combine strong internal performance data with a broader view of agent behavior, competitive activity and emerging opportunities across the ecosystem.”
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