At the beginning of the week, a agreement between OpenAI and the Spanish insurtech Tuio so that it can operate directly through ChatGPT y offer personalized home insurance quotes to your users. So far, nothing out of the ordinary in the world of AI assistants. What was abnormal is what came next: a sharp drop in the stock market of quite a few American insurers, which Goldman Sachs attributes directly to this agreement.
The shares of the main insurance brokerages fell due to investor concern about this news, and due to doubts that AI could change conventional insurance distribution channels. The biggest drop was experienced by Willis Tower Watson, with a decrease of 13%.
They were followed by Arthur J. Gallagher (9.4%), Aon (8.5%), Ryan Specialty (8%), Brown&Brown (7%), Mars & McLennan (7%). AIG resisted the fears better, as it only fell 2%. The losses have not remained in the US stock market, and yesterday they reached the insurers listed on the European markets, with drops of between 2.5% and 3% for Mapfre, Zurich or Axa.
The report that Goldman Sachs distributed to its clients explaining this drop indicates that this is due to the fact that the agreement between OpenAI and Tuio corroborates that ChatGPT users can directly obtain a home insurance quote directly in the chat. He also assures that very soon it will be possible to contract policies through ChatGPT. Something that can be a real nightmare for many insurers and insurance brokers aimed at end consumers.
As commented by OpenAI, the Tuio application, developed based on WaniWani’s AI distribution infrastructure, eliminates traditional difficulties in purchasing insurance, since it eliminates forms, calls and intermediaries.
To do this, it collects relevant information through a conversation in natural language with whoever wants to take out insurance, and then presents personalized quotes from insurers in real time. Of course, to get a Tuio quote with ChatGPT it is not enough to ask the assistant. It is essential to connect first to the ChatGPT application or to the Tuio app on its website.
Tuio was born in 2020 by Jose María Lucas del Portillo, Francisco de Asis Pardo Martin and Juan Francisco García Fernández. It currently has 50 employees, and nearly 100,000 clients. Its annual income is around 15 million euros.
The agreement with Tuio, the first step for the sale of insurance on ChatGPT
From OpenAI they have confirmed that their agreement with Tuio is just a first step in selling insurance through ChatGPT. They also approved a few days ago that Insurify, an insurance aggregator based in the United States, can start operating through its AI chat.
Wani Wani also points out that there are around a dozen applications for AI for insurance apart from these two, including those of several of its clients in North America and Europe, in the approval process. If everything goes as planned, they will go into operation over the next few weeks. It is therefore possible that the sum of this news, apart from the agreement with Tuio, has caused the massive sale of insurer shares, in a context in which the narrative about Artificial Intelligence can affect insurance brokers.
However, the Goldman Sachs report also pointed out that insurer shareholders had overreacted in their reaction, since they believe that these types of companies and intermediaries will continue to prioritize the relationship between people in signing and contracting insurance. They are not the only ones who have spoken out in this regard.
According to analysts at Wolfe Research, the massive sell-off of insurer shares in the US driven by the agreement between OpenAI and Tuio was exaggerated, since the development of ChatGPT, as we have mentioned, focuses on the area of personal insurance, and not on commercial insurance, which is what mainly concerns the insurers that fell the most.
In fact, Wolfe comments that most commercial lines insurers do not have the necessary structure or infrastructure to convert into a direct business model. KBW analysts have spoken along the same lines, considering that these massive sales, especially in the case of business insurance brokers, are an overreaction, since OpenAI integrations currently only serve as tools to obtain potential clients for personal lines.
Its experts consider that even if the possibility of contracting insurance through ChatGPT is launched, it would be another direct system for the final consumer, with a fairly limited impact on commercial insurance intermediation. Furthermore, they also comment, in line with Wolfe’s opinion, that the ever-increasing need for personalization probably justifies the presence of a real, human advisor in the process for a long time.
However, both KBW and other analysts suggested that The massive sale of insurance securities reflects investor concern about possible disintermediationas AI platforms increasingly allow insurers to reach consumers directly when they search for insurance information.
