By Bill Alpert
Shares of the biggest insurance brokers slumped this week, after Monday's unveiling of a ChatGPT-based app that will help homeowners select and buy insurance.
The app by the Spanish web-based insurer Tuio collects information during a conversation with consumers who are researching insurance on OpenAI's ChatGPT, and then gives them an instant quote.
Traders panicked, and the stocks of Marsh & McLennan, Arthur J. Gallagher, Aon, Brown & Brown, Willis Towers Watson, and Goosehead Insurance sank as much as 25%, after the Spanish web-based insurer Tuio announced Monday that its app would give personalized home insurance quotes and sell them a policy, all within a single ChatGPT discussion.
The drooping share prices offer investors a buying opportunity, said UBS analyst Brian Meredith -- who believes brokers and agents will remain the principal means of distributing insurance.
Commercial insurance brokers like Marsh & McLennan, or Ryan Specialty Holdings suffered the smallest hits, and by Wednesday were down around 5% from Monday. But those involved with personal lines insurance, like Brown & Brown or Goosehead -- more focused on personal lines insurance -- was down 25%, to $49.20.
OpenAI is hosting other insurance-selling apps for the one-third of adults it claims are using ChatGPT for financial research. Insurify's app lets shoppers compare auto insurance policies. The AI developer Wani Wani supplied the quoting platform for Tuio, and says it will announce a dozen AI apps for other insurers, in the coming weeks.
The brokerage stocks are just the latest sector to suffer the wrecking ball of a new AI demo. Last week, an Anthropic do-it-yourself programming tool clobbered enterprise software stocks, and even the stocks of the software industry's lenders.
But analyst Meredith says traders are overreacting to the AI threat.
"While personal auto insurance and other small commodity like risks (renters insurance) continue to see an increase in Direct to Consumer," he said in a Tuesday note, "commercial insurance and homeowner's insurance are complicated buying decisions where consumers value advice."
Buying insurance is complex, Meredith said, and the consequences of a wrong choice can be costly.
"While AI can educate consumers on buying decisions, we do not believe it will eliminate the need for advice from an expert," said the analyst.
He thinks that Marsh, Willis Towers Watson, and Goosehead are attractive at their newly discounted prices. The insurance brokerage sector has fallen over 15% this year, and the stocks are trading at relatively low multiples of their cash earnings, because insurance prices have been soft lately.
"We continue to favor the insurance brokers in 2026 as we believe growth expectations have bottomed with potential upside in a good economic environment," Meredith concluded.
Write to Bill Alpert at william.alpert@barrons.com
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February 11, 2026 15:37 ET (20:37 GMT)
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