Publicly listed insurance brokerage firms experienced notable declines in share prices Monday after news that OpenAI approved an insurance application to run within ChatGPT.
Reports that OpenAI has authorized the first insurance app on ChatGPT - created by Spanish digital insurer Tuio and using WaniWani's AI distribution infrastructure - were followed by heavy selling across the broker sector.
Market moves
- Willis Towers Watson (NASDAQ:WTW) led the downturn with a 13% drop in its stock.
- Arthur J. Gallagher (NYSE:AJG) fell 9.4%.
- Aon (NYSE:AON) declined 8.5%.
- Ryan Specialty (NYSE:RYAN) and Brown & Brown (NYSE:BRO) each lost about 8% and 7%, respectively.
- Marsh & McLennan (NYSE:MRSH) was down 7%.
- Insurer American International Group (NYSE:AIG) registered a smaller drop of roughly 2%.
What the approved app does
According to the reports, Tuio’s application leverages an AI-driven conversational interface to gather relevant information from users and return personalized home insurance quotes from regulated carriers in real time. OpenAI described the capability as removing traditional friction in the insurance purchase process by doing away with forms, phone calls, and intermediaries. The app is currently able to provide quotes, and purchasing features are expected to arrive soon.
Investor reaction and questions
Market participants reacted swiftly to the announcement, but some investors questioned why commercial and specialty brokers were among the hardest hit given that the reported application focuses on home insurance. Several market observers noted that brokers serving complex or specialty lines may be less vulnerable to immediate disruption because of the intricate nature of those products.
The episode highlights investor sensitivity to technological change in distribution channels, even when the initial use case is narrowly targeted at personal lines. It also underscores differing views among market participants about how broadly an AI-driven sales channel could affect established intermediary models.
Summary of developments
OpenAI's approval of Tuio’s ChatGPT-integrated insurance app coincided with a sharp selloff in major broker stocks, led by a 13% single-day fall in Willis Towers Watson. The app, supported by WaniWani's infrastructure, offers conversational quote generation for home insurance and is expected to add purchasing capability soon. Market participants debated the relevance of the news for commercial and specialty insurance brokerage segments.