"AI Phobia" Triggers Plunge in U.S. Insurance Index [New York Active Stocks]

Industry-wide fear spikes with every new AI app launch

On February 9 (local time), shares of U.S. insurance brokerage firms plunged across the board after online insurance shopping platform Insurify launched its artificial intelligence (AI) application (app).

On the day, the S&P 500 Insurance Index fell 3.9%, marking its biggest drop since October last year. In particular, major insurance broker Willis Towers Watson tumbled 12%, suffering its worst decline since November 2008 at the height of the global financial crisis. Arthur J. Gallagher and Aon also fell 9.9% and 9.3%, respectively.

Matthew Palazzola, an analyst at Bloomberg Intelligence, said, "Insurance brokerage stocks are staggering as they plunge in unison," adding, "This reflects market concerns about Insurify's new service and the new AI tools unveiled by AI startup Anthropic."

The Insurify app, launched on February 3, uses ChatGPT to compare auto insurance premiums in real time based on vehicle information, customers' credit histories, and driving records. Analyst Palazzola said, "It could pose a threat to the consulting work of insurance brokers," but added, "I see it more as a tool that enhances work efficiency rather than a complete replacement."

Investors' anxiety that new AI apps could shake up entire industries began to be fully reflected in the stock market last week. In particular, the launch of Anthropic's new tools, designed to automate specialized office work such as legal services, data processing, and financial research, became the decisive trigger for this kind of 'AI phobia.' Investors sold indiscriminately across sectors, including Expedia, Salesforce, and the London Stock Exchange Group (LSEG). About 611 billion dollars in market capitalization evaporated from 164 stocks in the software (SW) and financial services sectors.

This anxiety intensified as software companies released their earnings. Microsoft (MS) saw 357 billion dollars in market capitalization wiped out in a single day on concerns over slowing cloud growth and massive AI investment costs. Weak guidance from so-called 'big tech bellwethers' such as ServiceNow and SAP escalated into a crisis of confidence for the entire sector.

KeyBanc analyst Jackson Ader said, "Over the past few months, investors believed stock prices were at 'historic lows,' but they have now experienced that there is a deeper basement below the basement," adding, "People have become cautious about saying that stocks are 'too cheap.'"

This content was produced with the assistance of AI translation services.