Is AI replacing insurance agents? New labor study says ‘not yet’
Amid concerns about artificial intelligence “replacing” humans as usage increases, a recent labor study found most insurance companies plan to increase staff hiring over the next year.
The 2025 Insurance Labor Market Study released by insurance recruitment specialists Jacobson Group and Ward, the performance benchmarking division within Aon’s Strategy and Technology Group, found 55% of American insurance companies plan to hire more staff over the next 12 months, primarily in life/health insurance (60%). The largest growth is projected to be in technology, underwriting and claims.
According to Jeff Rieder, partner and head of benchmarking, Aon STG, the statistics indicate that human talent still reigns supreme in insurance despite investments in technology.
“The key theme, from my perspective, is that that individual, face-to-face consumer interaction that financial advisors provide is going to remain critical… At this point, we’d still say that AI, in terms of replacing individuals completely, is still pretty far down the path,” Rieder said.
Projected growth and hiring
According to the study, most insurers are looking to hire due to an expected increase in business volume (33%) or planned expansion of business or new markets (34%). Seventy-four percent of companies expect to grow revenue over the next 12 months, rather than reduce staff due to AI job losses.
Rieder explained that there was “kind of a rush of hiring” in the 2021-2022 cycle as companies anticipated more growth than was actually experienced. Now, in a “post-pandemic” environment, he said there has been a mixed approach to hiring as insurers are also reacting to the resulting fallout and inflationary markets.
“When we’re seeing some of those roles that are being hired for now, companies are still trying to actively grow, which is why we’re seeing some of the areas that are hiring. Sales and marketing for the life and health area, life and annuity writers in particular, still remains very heavy,” he said.
Automation and redundancy
The study also found 12% of American insurance companies plan to reduce staff over the next 12 months, marking an increase from 10% in the previous year.
This is mostly due to business restructuring (10%), rather than AI job losses. However, automation improvement requiring fewer staff and areas currently overstaffed are tied close behind at 9%, followed by contraction of business operations/discontinuing operations at 7%.
Rieder acknowledged that many insurance companies are investing heavily in technology at the moment, including AI and the technology experts who can develop and maintain those systems.
“When you look at roles — particularly in underwriting, which was the No. 1 area across our life and annuity companies, followed by technology — we’re seeing heavy investments in core system replacements in the life sector right now. Companies are investing heavily in updating or replacing those technologies, but that also includes advancements in predictive modeling, predictive analytics, artificial intelligence, and really enhancing their digital strategy,” he said.
Humans in the loop
Despite the heavy investments in technology and some redundancies related to automation, Rieder said a strong need for human talent prevails.
“What was interesting for the life sector is underwriting was actually the No. 1 function that was expected to increase over the next 12 months. I think what that indicates is that while many of the underwriting processes are being streamlined and automated, the need for that true underwriter in that individual that understands risk and can apply that to each company’s appetite is very much still in high demand,” he said.
He added that while tech hiring was No. 1 overall, that result was more influenced by P&C carriers while it was a No. 2 function on the life/health/annuities side.
“There’s so much complexity with all these new technologies, new systems, that people still need to have that person-to-person interaction to understand their own individual risks that they have or their investment needs. That financial advisor is still going to be crucial to a very, very large population, despite all the investments that are being made in technology and analytics. So, we’ll still see that phrase ‘human in the loop,’ even around all these technological changes,” Rieder said.
No evidence of AI job losses
Further, Rieder suggested there is no evidence indicating advisors will lose jobs for not being an expert in AI.
“I don’t know if there’s any empirical data. Anecdotally, we know that individuals are able to work faster by using AI. But I don’t know if I’ve seen anything empirically that does an analysis between those who are adept versus those who are not,” he said.
However, he noted that it does benefit advisors to know how to use AI and understand how it’s being incorporated into business decisions.
“There’s so much volatility and complexity in the world today, whether we’re talking tariffs, inflation or global uncertainty, that I would say the financial advisor is still critical to that overall relationship because they can help individuals navigate these really complex issues better than any type of technology or artificial intelligence can at this point,” Rieder said.
The Jacobson Group is an insurance talent recruiting firm founded in 1971 and based out of Chicago, IL.
Aon is a British-American company that offers professional services and solutions. It was founded in 1982 in Chicago, IL, and now has nearly 70,000 employees in 120 countries. Aon’s Strategy and Technology Group provides insurance insights and software.
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