Picture this. You ask an artificial intelligence assistant to find you cheaper car insurance, then you go to bed. By morning, the AI agent has checked a dozen companies and lined up a better deal.
While that future is getting closer, the insurance industry has several reasons to pump the brakes.
Investors got nervous this fall when Meta launched Muse, its personal AI agent. The worry was simple. If AI can shop for insurance on its own, who needs the websites and agents that connect buyers with insurers today? Stocks of those companies have fallen about 15% on average since early September.
A new report from investment firm William Blair suggests those fears may be overblown. The firm’s analysts recently spoke with David Seider, chief commercial officer of The Zebra, an online insurance marketplace and agency. The Oct. 8 discussion was part of William Blair’s “On Risk” series, which looks at how artificial intelligence is changing the insurance business.
The first hurdle is money. A rough price estimate is cheap for an insurer to produce. A real quote that a customer can buy is not. Insurers often must purchase outside data, such as driving records, before they can offer a firm price. That data can cost up to $20 per quote.
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“If AI agents were to continuously shop for coverage, carriers would face a meaningful increase in customer acquisition costs,” the report said.
In other words, an AI bot that checks prices every week could run up a big bill for insurers. That gives insurers a reason to keep control of how customers reach them. It could also keep today’s middlemen in business, since they help screen shoppers before an insurer pays for a quote.
The second hurdle is regulation. Insurers must give customers certain coverage details and disclosures in a way that follows the law. When an AI agent handles the conversation, the insurer loses sight of what the customer actually hears. That creates legal risk. There is also an open question about how an AI agent would be paid for helping close a sale. Insurance commissions are tightly regulated, and current rules were not written with artificial intelligence in mind. William Blair said these issues may keep a licensed human involved in the process for some time.
Trust is a third factor. Even if AI does the legwork, many consumers will still want to pick the company themselves. That means a well-known brand could carry as much weight as ever.
So, what comes next? William Blair expects the online insurance market to keep growing into 2027. The Zebra said its digital revenue rose by double digits over the past year. Insurers are earning strong returns, so they are spending more to win customers online. Progressive leads the pack, while Allstate and GEICO have grown more skilled at digital marketing in recent years. Competition is also spreading from car insurance into home insurance.
Growth will likely slow from the roughly 30% pace seen in the first half of 2026, the firm said. Car insurance prices have also leveled off after a volatile stretch. Some smaller insurers are cutting rates in targeted areas to stay competitive. Home insurance will likely be slower to hand over to artificial intelligence. Homes are worth more than cars, and claims can be far larger. Insurers prefer a person in the loop, and many homeowners may feel the same.
The bottom line from William Blair: AI will change how people shop for insurance. But a major shakeup of the companies that sell it is unlikely anytime soon.
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