Takeaways:
- Several insurers' stocks dropped with AI app launches
- AI will generate value through efficiency, speed and service
- Productivity gains will strengthen insurers' business
February's price drop of several insurance company stocks, following AI developments, shows a severe impact but won't be the final outcome, an insurtech expert said.
Michael Konialian, founder and CEO of
On February 9, companies saw stock price declines ranging from 2% for AIG to 13% for Willis Towers Watson, with Arthur J. Gallagher, Aon and Marsh & McLennan seeing declines within that range. The market event followed the launch of AI-based insurance apps from Tuio and Insurify (through ChatGPT).
AI has potential to create value for insurers, as its use in the industry increases, according to a
For brokers, AI will improve efficiency at counseling clients on risk and improve margins. AI can create value for underwriting and distribution by MGAs. For software and data platform insurtechs, AI will reshape architecture and procurement patterns. As third-party administrators attract more private equity investment, they will be better able to improve their speed, consistency and service level for high-volume workflows, the McKinsey report stated.
Overall, AI will create productivity gains that are bound to help insurance companies, Konialian explained. "For the experts, for the advisors, who are really often generalists, as well as for brokers and experts on the brokerage and carrier levels, these are really transformative tools," he said. "No one human is going to be an expert at tax and financial planning and medical underwriting and the marketplace of carriers and products, and be able to navigate a lot of the intricacies."
In the next six to 12 months, AI will be "superhuman" in its capabilities, Konialian added. Experienced professionals will leverage that to accomplish more, he said. "It will actually advantage those who are experienced, those who are good systems thinkers, those who have a higher capacity to manage more and do more," Konialian said. "A 3x person is going to be a 10x person, and a 10x person is going to be a 100x person."
This in turn will improve insurance business prospects, according to Konialian. "If you look at what drives the value of companies, it's their prospects for revenue, their prospects for margin and the durability of those revenues. For revenue, it's only going to go up, because right now, these products are so difficult to buy and sell – excruciatingly so," he said. "So little of the actual latent demand is met effectively today. As it becomes easier and more scaled to distribute these products, the market is going to capture much more of that latent demand. It's very good for revenue prospects and we're going to see that in 2026."
The McKinsey report estimated that generative AI could "unlock" $50 billion to $70 billion in revenue for the insurance industry. Private equity has already recognized this, with continued investment during 2025, despite softer deal flow, the report added.
