AI disrupted UK’s personal lines distribution. Why Intact exec says it won’t happen in Canada

Intact’s artificial intelligence (AI) investments over the past decade have generated “north of $200 million” in benefits, Intact CEO Charles Brindamour said in a quarterly earnings call Wednesday.

But while they have helped Intact develop its fast-growing digital sales channel, AI disruption in Canada is not likely to negatively affect the broker sales distribution as it did in the United Kingdom, Brindamour told investment advisors asking about the impact of AI on the sales distribution models.

“We’ve been focused on that sort of [AI] disruption for over a decade,” Brindamour said. “That’s why we have built the brands we’ve built. That’s why we’ve invested massively in the physical world [i.e. the broker channel], and that’s why we’re investing also in our digital channel, which have been our fastest growing channels in the past 24 months.

“And right now, we’re doing a fair bit of work to make sure that when it comes to [internet] searches, we show up prominently in all channels, including in [broker] or in [digital] distribution channels.”

Brindamour not only put a dollar figure on the benefits, but outlined the primary uses to which it’s putting large language models, a subset of what’s known as AI.

“Our AI investments continue to be concentrated where they move the needle the most. For example, we’re investing in four distinct areas: advancing our risk selection advantage, as we have in the last decade; improving customer journeys to drive organic growth; significantly accelerating software development; and improving operational efficiency.”

He said the company has primarily focused on risk selection and software engineering. When it comes to software engineering, for example, Intact has increased its output by close to 20% per dollar of investment in less than 24 months, Brindamour said. Both risk selection and software engineering have been deployed to develop the digital side of Intact’s distribution channel, he added.

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“We’ve made massive investments…in the risk selection side of things and…we’re doubling down on that, but we’re also deploying AI in the digital funnel,” Brindamour said. “I do think that large language models will certainly have an impact on our ability to capture traffic and shopping in the digital channel. This is an area that we’re very, very focused on at this stage in terms of manufacturing the product, per se.”

During the Q&A portion of the call, investment advisors noted how AI disrupted the personal lines insurance sales distribution channels in the United Kingdom — essentially to the detriment of the broker channel, by titling sales towards the digital model. One asked if there was anything special about the Canadian P&C industry or regulation that would prevent that from happening in Canada.

“We spent a lot of time looking at personal lines in the UK,” Brindamour replied. “I think one big difference in the UK is that the manufacturers just went along with it, basically, and the relationship shifted with the distributor.”

He acknowledged AI disruption would “change the nature of advice” in the future, and “could contribute to the fact that the direct world today is growing faster than the broker distributed world in personal lines.”

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However, in Canada, the focus of technology has been to serve the basic purpose of making the consumer whole again after a loss, Brindamour continued. And in Canada, Intact has been deliberate in using technology to build out both the digital and broker distribution channels to achieve this goal.

“We built optionality to win on both sides,” Brindamour said, including the direct and broker distribution channels.

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.