Briefing: Is AI about to rewrite the rules of insurance distribution?

The rise of generative artificial intelligence (AI) – which creates new text, images, audio and video content – has been grabbing headlines for several years. Now, the technology has set its sights on impacting the insurance world.

The news that OpenAI’s ChatGPT tool had authorised its first app to provide insurance quotes came earlier this month (February 2026) and since this announcement, we have already seen Experian and MoneySuperMarket launch similar tools.

Customers can now request a quote, refine their answers and compare options without ever visiting a traditional website. The journey begins with a question typed into an AI’s chat window, not a search engine or broker homepage.

On one level, this looks like another distribution partnership – but the market’s reaction suggests something more.

When OpenAI, the owner of ChatGPT, signalled its deeper move into the insurance world, shares in several listed insurance brokers and comparison businesses fell sharply.

Investors react to many different signals, of course. But sharp movements of this kind usually reflect a concern that something more structural may be underway – particularly when control of the customer relationship appears to be in play.

That is the real issue here – and we have seen this dynamic before.

Price comparison websites (PCWs) were initially treated as just another distribution channel, but they soon went on to reshape personal lines distribution entirely. They aggregated demand, compressed margins and trained customers to shop annually on price.

Conversational AI, like chatbots or virtual agents, has similar potential – PCWs changed where customers compared policies. AI could change where they begin their search in the first place.

If the starting point for insurance becomes a single conversational interface – perceived as neutral, intelligent and personalised – the competitive battleground moves upstream.

The promise is obvious. A conversational journey allows customers to explore cover in a more natural way, testing scenarios, clarifying uncertainties and asking follow up questions in plain English.

Instead of moving between tabs and comparison tables, the interaction feels continuous and responsive. The process appears simpler and the path to purchase feels much more direct.

But speed has never really been the industry’s core weakness.

Over the past decade, insurers and intermediaries have invested heavily in streamlining quote and buy journeys. The number of questions asked has fallen and digital pathways have been optimised relentlessly.

The real problem has rarely been how long it takes to buy insurance, it has been understanding.

What am I covered for? What am I not covered for? Is the cheapest policy appropriate? What happens when I claim?

A smoother conversational interface does not automatically solve those questions. In fact, it risks creating a new tension.

Consumer Duty considerations

When information is delivered fluently and interactively, customers may assume a level of guidance and comprehension that goes beyond the underlying mechanics of comparison.

This is where Consumer Duty comes sharply into focus. The regime was never intended to be a box ticking exercise, but a test of whether customers genuinely understand the products they are buying and the outcomes they are likely to experience.

If product explanations are summarised inside an AI conversation, firms will need to consider how nuances and exclusions are conveyed so that they are not diluted.

It is important to remember that insurance is defined as much by what it does not cover as what it does cover – and that detail cannot be lost in the pursuit of simplicity.

So, if customers are guided through choices within a conversational flow, firms must be confident that those choices are informed by a genuine understanding of scope, limits and claims realities – not just headline features or price.

None of this makes conversational AI inherently problematic.

Properly designed, it could enhance clarity and accessibility. But it could also accelerate commoditisation and concentrate distribution power in new hands, just as PCWs did all those years ago.

The industry adapted then because it had no choice.

We are still at the early stages of ChatGPT involvement for now, with some AI tools being more exploratory than providing a full user journey.

They key question, however, is whether we are witnessing the start of another incremental channel shift – or the early stages of a deeper reordering of insurance distribution.

One where the control of customer engagement sits outside the industry’s traditional boundaries.