It’s the turn of insurance brokers to get hammered by AI disruption fears
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Launch of an AI tool by Insurify sparked fears about the industry facing disruption..
PHOTO: BLOOMBERG
NEW YORK - US insurance broker stocks were pummelled on Feb 9 as the launch of an artificial intelligence (AI) tool from privately held online insurance shopping platform Insurify sparked fears about the industry facing disruption.
The S&P 500 Insurance index closed down 3.9 per cent in its biggest drop since October. Insurance broker Willis Towers Watson was the worst performer in the group, plunging 12 per cent, its worst trading session since November 2008. Arthur J. Gallagher followed with a 9.9 per cent drop and Aon fell 9.3 per cent.
“The insurance broker stocks are getting hammered,” Bloomberg Intelligence’s insurance analyst Matthew Palazola said, noting that “there could be concerns about the new Insurify tool and Anthropic’s new AI tools”.
The applications “may be a threat to some consulting businesses of insurance brokers, though we view them as a force multiplier rather than an existential threat”, he added.
Insurify’s app uses ChatGPT to compare auto insurance rates using details about a vehicle, the client’s credit history, driving record and other inputs. The firm said the app was launched on Feb 3.
Investors’ concern about how new AI applications can upend many industries spilt over into the stock market in a big way last week, triggered by the release of new tools from AI start-up Anthropic that were designed to automate work tasks in industries ranging from legal and data services to financial research. BLOOMBERG
