A startup called American Growth Insurance said today it has raised almost $70 million in committed equity capital to transform the insurance industry.

It plans to do so with an aggressive, technology-focused business model that’s quite unlike anything its competitors do. AGI, officially known as AGI Holdings LLC, says it has worked out how to use artificial intelligence to automate insurance processes on a massive scale, and it’s itching to apply its expertise.

But it won’t be selling its AI-first operating system to anyone. Instead, the plan is to seek out independent insurance firms and brokerages across the U.S., buy them up, and then completely overhaul how they run their business with its technology.

Ultimately, it will transform the firms it acquires into “AI-native” insurance firms that use autonomous AI agents to streamline their operations and enhance their efficiency and profitability.

AGI believes there are plenty of insurance companies that will be willing to consider its offers. Growth in the insurance industry has been hard to come by in recent years, with many firms being held back by a lack of qualified personnel. According to AGI, as much as 40% of insurance agents working in the U.S. today are within a decade of retirement, and the industry is struggling to replace them.

That’s a problem, because hiring has been key to the long-term growth strategies of many of America’s biggest insurance firms. Others have managed to grow by making acquisitions, cutting costs and then reselling those firms or their assets at a higher multiple. But AGI says neither model is sustainable given the industry’s increasing talent shortages.

Reinventing how insurance gets done

AGI’s approach is fundamentally different. Instead of underinvesting in the companies it acquires, its plan is to use AI to totally reinvent how they run their operations. It pairs a “human service model” that ensures customers get to speak with real people, with highly automated back-office operations, enabling them to scale their businesses without having to hire more flesh-and-blood insurance agents.

AGI Chief Executive Brian Morgan said insurers are better off being acquired than trying to implement AI automation themselves. “Most agencies have been told that AI matters, but they’re never told what to buy or how to make it work,” he said. “We acquire strong agencies and rebuild how the work actually gets done, so a team can serve a larger book without losing the relationships the business runs on.”

The round was led by the venture studio Atomic and the private equity firm Rockbridge Growth. It’s an unusual pairing that allows it to benefit from the expertise of a private equity firm that specializes in mergers and acquisitions, and a venture capital firm that’s focused on energizing high-growth technology startups.

“AGI’s goal is to help smaller brokers leverage technology while supporting the high-touch service their customers demand,” said Rockbridge partner Tony Pulice. “We believe Rockbridge’s experience deploying this model in related industries provides a solid roadmap for AGI.”

AGI says it has already proven that its AI-native model works. While it has only just completed its first acquisition, it has spent the last year collaborating with 10 partner agencies to develop and test its AI-first operating model. Those agencies saw their profits increase by around 50% on average through a combination of increased revenue and productivity gains.

Holger Mueller of Constellation Research said it makes sense for someone to try to overcome the operational inefficiencies of the insurance industry with a more standardized approach to implementing AI. “While some insurance agencies might be able to implement AI in-house and increase their productivity, AGI offers a new option,” the analyst said. “It buys agencies outright and then follows a proven blueprint that has delivered some impressive returns for early adopters. This is not surprising because personnel costs are one of the largest expenses for any insurer.”

A good chunk of the cash from today’s round will be set aside for further acquisitions. Morgan said the company hopes to make “several more” in the coming months, and is eying $10 million in annual revenue by the end of the year.

“Insurance distribution is a massive category that has never been rebuilt from the architecture up,” said Atomic Vice President Michael Stenclik. He believes AGI’s acquisition-focused approach is necessary because “the value of AI compounds only when it shapes the whole company, rather than sitting on top of it as another tool.”

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