Property owners leaving the fate of their most important asset in the hands of AI is a huge risk
Something significant just happened in insurance distribution. Consumers can now obtain insurance quotes directly inside AI tools such as ChatGPT, without visiting a broker website, making a call, or even navigating a comparison site.
To be clear, this is not a pilot or a proof of concept. It is live, and clients are already using it.
Of course, the insurance industry is not naive to the impact of rapid disruption. The launch of aggregators profoundly changed the landscape in the noughties, and digital-first insurers have driven rapid innovation and increased competition. But live quote engines inside conversational AI feels different, and the potential impact is perhaps even more profound.
Personal Lines is the low-hanging fruit
Personal lines face the most immediate disruption. These commoditised, high-volume products are precisely the business AI quotation engines are designed to handle. A consumer who once typed a query into Google, clicked through to a comparison site, and filled in a lengthy form can now simply type a prompt and receive personalised pricing in seconds.
This is where aggregators, rather than brokers, face perhaps the greatest challenge. If ChatGPT becomes the place consumers begin their insurance journey, and the early adoption data from AI tools suggests that is already happening, then aggregators risk becoming redundant intermediaries in their own right. The irony is obviously not lost here; the very tools that disrupted traditional practices now face the same threat.
Non-standard Lines is a different story and an opportunity for intermediaries
The picture looks quite different for non-standard and specialist risks, and intermediaries operating in these markets have reason for optimism. Non-standard risks, in particular property risks, are not amenable to conversational AI quotations, and therefore, the requirement for a broker with smart, supported insurance solutions remains irreplaceable. For example, a client with a subsidence history, a listed building, adverse claims history, a property built from unconventional materials, or even an owner with a high-risk occupation. These clients cannot simply ask ChatGPT for a quote and expect a meaningful result.
For brokers with a non-standard offering, this is a moment to shine. Whilst no one can guarantee these policies will be permanently immune from AI disruption, they are protected from immediate impact. Brokers have time to pivot and diversify their offering, and build back revenue lost to AI intervention in standard lines.
The value of intermediated advice remains strong
The arrival of AI quoting in personal lines actually serves to elevate the value of genuine, trusted advice.
A consumer can get five insurance quotes in ninety seconds from ChatGPT, but the broker fundamentally delivers something AI cannot – the human touch.
Only trusted advisors can spot gaps in cover, understand a client’s unique circumstances, concerns and ambitions, and only a broker with a deep personal connection to their client can structure a package of cover that will deliver the best possible outcomes. Afterall, a relationship that spans a home purchase, a remortgage, and the associated buildings and contents insurance is not one that ChatGPT is going to replicate. The human relationship, built over time, remains relevant.
Lack of AI regulation
The UK does not have a centralised approach to the regulation of AI, with regulators choosing to monitor growth in the adoption of AI and work within existing regulatory frameworks to supervise it.
This is particularly important when we look at the Consumer Duty. AI quoting engines are highly effective at delivering an attention-grabbing premium, but they’re far less effective at ensuring the consumer understands the policy they’re buying and that it delivers fair value. Exclusions, excesses, and underinsurance risks are not topics suited to a workflow optimised for speed and simplicity. Underinsurance in particular is a huge issue right now. 70% of UK properties are still insured below their true rebuild cost, meaning that for owners leaving the fate of their most important asset in the hands of AI, rather than seeking the advice of a broker is a huge risk, and one that regulators cannot afford to ignore for long.
Likewise, the consumer who buys home insurance through ChatGPT and then discovers at the claim stage that their listed outbuilding was never covered has suffered real harm. Or a consumer who is sold a cheap policy that fails them at the point of need hasn’t received a good outcome, regardless of how frictionless the purchase journey felt. Likely, this will only further the negative perception of insurance amongst the public.
Again, this creates an opportunity for intermediaries.
Brokers need to act now
AI moves fast, and so too must intermediaries. Those most at risk rely on standard personal lines without building a deeper value proposition. For them, the urgency to pivot and diversify is high. For those already operating in niche and non-standard lines, where the model is built around genuine advice and relationships, the picture is more nuanced, but complacency would still be a mistake.
It’s time to re-evaluate. Intermediaries must seek out wholesale partners with the technology, products (standard and non-standard), and support to help them remain competitive in the face of such large-scale disruption.
Mark Chappell is Head of Intermediary at Ceta.
