Canadian insurance carriers remain stuck at the proof-of-concept stage for artificial intelligence, well behind other industries and countries, but the threat that AI-powered comparison platforms pose to brokers has already arrived. According to Duncan Meadows, partner in insurance business transformation and property and casualty leader at EY Canada, most companies are still experimenting while the market is pricing in disruption.
"In terms of generative and agentic AI, insurance is probably behind some other industries, and Canada is probably behind some other geographies," Meadows said. "Most companies would characterize themselves as being at the proof-of-concept stage." Generative AI - used for research, summarization and note-taking - has seen the widest uptake so far. Agentic AI, which can autonomously execute workflows, will be more impactful in the medium term but has not matured anywhere in the Canadian market.
Underwriting and claims come first
Carriers are directing AI investment toward underwriting and claims rather than distribution. The economics are strongest there: better pricing accuracy on the underwriting side and faster, cheaper claims handling on the indemnity side. "Distribution is probably not the place where there's the most AI deployment so far," Meadows said.
Caution explains much of the lag. Carriers are conservative about using AI in customer-facing interactions and prefer to test it internally first. Contact centres are the main exception - automated note-taking, next-best-action prompts and chatbots are relatively common - but broader distribution applications remain in early stages.
The US broker shockwave
That hesitancy has not stopped others from moving. Meadows pointed to the launch of Insurify, an AI-powered insurance comparison platform in the United States, as a signal the market is already pricing in broker disruption. "There were some pretty big hits in terms of US broker stock price," he said. "The market are making some bets that in the medium term, small and medium-sized commercial insurance may be digitized to some degree."
Canada's broker shield - and its limits
The Canadian broker channel still holds a much higher market share than comparable countries, and that will not collapse overnight. Canada shows a strong societal preference for face-to-face interaction, and Meadows said brokers will persist as long as that demand exists.
But the segment most exposed to AI disruption is easy to identify. Younger, price-sensitive, digitally native consumers - those already comfortable buying online and less attached to any single brand - are the first to leave the broker channel. "If you're 30 years old, looking for the best price, [you are] price sensitive, less brand loyal, you're more likely to use an Insurify or another AI-enabled comparison tool," Meadows said.
What AI means for brands and consolidation
This shift changes the competitive dynamics. When consumers ask an AI to recommend the best policy, traditional advantages like brand recognition and broker relationships matter less. What counts is how a product performs in an algorithmic comparison: pricing, features, coverage, ratings.
Consolidation among brokers and carriers will continue regardless of AI - scale advantages already push the industry toward fewer, larger players. But AI also opens the door from the other direction. New entrants - digital brokerages, AI-native comparison platforms, new MGAs - could use the technology to compete in ways that were not viable before. "AI presents opportunities for new entrants," Meadows said. "Whether those are new digital brokerages or comparison insurance players, or maybe new MGAs or carriers."
Why this matters for insurance professionals
The window for Canadian insurance to stay at proof of concept while competitors move ahead is narrowing. Brokers who serve young, price-sensitive clients need to recognize that a segment of their market will not wait for the industry to catch up - it will go direct to AI tools that already exist. For carriers, the pressure is twofold: accelerate AI deployment in underwriting and claims to lock in the cost and accuracy advantages, and start building the distribution infrastructure that can thrive in an AI-mediated marketplace. As Meadows put it, "With the amount of focus on AI, I expect the insurance landscape to shift a fair amount over the coming years."
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