Stock prices for a number of U.S. insurance brokers dropped on Monday following media coverage about a new artificial intelligence application operating inside ChatGPT. The app, created by Spanish digital insurer Tuio and reportedly approved by OpenAI, is described as a tool that can generate personalized home insurance quotes and, at a later stage, enable the user to complete a policy purchase within the chat experience.
The functionality reported in the media indicates the tool gathers necessary details through natural conversation and then provides tailored quotes in real time from regulated carriers, removing what OpenAI characterized as traditional frictions such as forms, phone calls and intermediary steps.
Among the companies whose shares moved lower were Arthur J. Gallagher, Aon PLC, Brown & Brown and Willis Towers Watson. The selloff reflected investor concern that AI platforms could disrupt conventional distribution channels for insurance.
Analysts at Wolfe Research, including Tracy Benguigui, pushed back on that market response. In a research note, they described the selloff as "overblown," arguing that the ChatGPT development pertains to personal lines insurance, while the brokers within their coverage universe are predominantly focused on commercial lines.
The Wolfe team also emphasized constraints within commercial insurance markets, noting that "most commercial lines carriers do not have the set-up/infrastructure to transform to a direct to business model." They suggested that these structural limitations reduce the immediacy of any threat posed by an AI-enabled direct-to-consumer or direct-to-business distribution channel.
The analysts further observed that share prices for these brokerage firms are already trading at depressed multiples as investors weigh an industry characterized by being "human capital intensive" and an "expensive intermediary on the value chain." Despite downplaying the immediacy of the risk from this particular ChatGPT integration, Wolfe Research maintained a cautious view about the broader potential for AI to disintermediate insurance intermediaries over time.
In sum, the Wolfe analysts see the market reaction as disproportionate to the specific capabilities described in the report, given the distinction between personal and commercial lines and current limitations in carrier infrastructure.
Note: Reporting in this piece is based on the analysts' comments and the media account describing an AI application built by Tuio and reportedly approved by OpenAI. No additional events, dates, or outcomes beyond those reported by the analysts and the media account are asserted here.