Insurance Brokers Tumble on New AI Scare

Comments

• yogibearbull

  February 10

  This may revive direct-selling channels for some insurance. Even insurance agents handle most tasks remotely. They rely on pictures from drones or Google and insurance databases to underwrite new insurance. The days of agents visiting homes or facilities are long gone.
• Crash

  February 10

  Yes, and it sucks. It is literally impossible to call our agent. The "local" number gets auto-routed to Portland. Or I can send an email, not knowing how soon the reply might come. "You want to talk to an actual human? F*** you, we don't care." It sucks to be treated with such contempt by the f*****g bean-counters.
• msf

  February 10

  I must be missing something. "AI" (I use the term loosely as it can cover almost anything automated) has been used in insurance, including selling insurance, for years.
  
  "[A large language model AI program] removes traditional friction points in insurance purchasing by eliminating forms, calls, and intermediaries."
  
  That seems to be the only relatively new change, and it's not as radical as OpenAI claims. Many people purchase insurance online already without human intermediaries. What appears to be changing is just a move from typing to voice (something large language models are good at). As shown in Star Trek, 1968 (Assignment Earth):
  
  
  
  The Zebra has a graphic on this page showing that the responses to the question: "Have you used a chatbot to file a claim or get a quote?" were 76.1% yes, 19.1% no, 4.8% unsure.
  
  "Lemonade has reported that its chatbots, Jim and Maya, are able to secure a policy for consumers in as little as 90 seconds and can settle a claim within 3 minutes. "
  https://content.naic.org/insurance-topics/chatbots
  
  (Lemonade did not seem to offer me a chatbot option. Aside from the time to enter the data, it could, like many sites, come up with a quote in a couple of minutes.)
  
  The P&C business in general has bigger problems, notably the rising cost of liability coverage. The underlying auto coverage requirement for umbrella policies now seems to be moving to $500K (one person). It used to be half that. More homeowners are going bare due to rising costs.
  
  If insurance brokers get hit, it may be because there are fewer people willing to buy insurance, not because customers are talking to chatbots.
  
• hank

  February 10 edited February 10

  I'm usually at least 25 years behind the times. Insurance provider hasn't changed in 30+ years. Stood 100% behind me when a truck driver who didn't speak English ran a red light and totaled a rental car I was driving in Florida years ago. Have used a local agency for years. They offer policies from different companies and shop for best fit. Pleasant and knowledgable personnel. Doors are open 9-5 weekdays. No appointment necessary. When shopping for new vehicles they are willing to whip up a quote if I provide a VIN so I can consider insurance costs before the purchase.
  
  No. They don't come to the door any more. But I remember the fella who used to show up monthly at my parents' home in the 60s. Wore a suit & tie and carried an impressive looking leather case loaded with documents. Visits lasted 10-15 minutes.
  
  Thanks for the video @msf
  
• Sven

  February 10

  @hank,
  I received essential the same information you posted on the insurance from S&P DJI Daily Dashboard - Tuesday, February 10. (Bold fonts added to emphasize the point)

  Investors are becoming increasingly discerning regarding AI’s actual impact on the bottom line, which was clearly visible yesterday: while Software climbed 3.3%, the S&P Composite 1500 Insurance Brokers sub-industry suffered its steepest decline since March 2020, plummeting 9% following the release of a new ChatGPT-integrated AI insurance app that threatens to disrupt the traditional brokerage model. Insurance Brokers have already been under pressure before yesterday, having underperformed their industry, their sector, and the broad market by a wide margin since the end of 2024.
• DrVenture

  February 10

  If my broker was like 1968 Teri Garr, I'd go to the office in person for visits!
  
  
• hank

  February 10 edited February 10

  DrVenture said:

  If my broker was like 1968 Teri Garr, I'd go to the office in person for visits!

  +1
  
  I don't remember her. '68? Working my butt off last year in college. Rarely watched TV / films. But the voice & delivery remind me of Marilyn Monroe. Obviously very attractive. I can assure you the ladies in the in the insurance office I visit bear no resemblance.
  
  Loved the video. Memories .... Thought I'd "made it" when I'd saved up enough $$ to buy a big heavy Underwood manual typewriter after college. But in a few years it was obsolete and I went in debt to buy a Smith Corona electric typewriter. Faster and quieter. Half as large or heavy.