Insurance brokers have an edge over insurers as consumers move to AI tools to research insurance, because large language models favour the reviews, blogs and advice content brokers already produce over the paid keywords insurers rely on, according to Paul MacDonald (pictured centre right), executive vice-president of personal insurance and digital channels at Definity.
MacDonald was speaking on an insurer executive panel at the Insurance Brokers Association of Ontario’s (IBAO) 2026 convention in Toronto, moderated by IBAO CEO Colin Simpson (pictured left), which turned to the growth of direct-to-consumer insurance.
Peter Janzen (pictured centre left), executive vice-president and president of Intact Insurance Canada, said the way people search is changing fast. He said that two or three years ago, about 3% of searches went through large language models such as ChatGPT, compared with about 40% today, and that Intact can see the same trend in insurance.
MacDonald said customers have drifted toward direct writers largely because they increasingly research insurance online, and direct writers are forced to have a stronger online presence.
“Directs, by virtue of not having distribution, are forced to have more of an online presence,” he said.
Read more: Skip the glossy LinkedIn AI pitch, insurers warn brokers
Brokers are catching up, he said, and in the US, they are moving faster than insurers.
“In the US there’s more investment from the broker side into AI, web-facing AI, than there is from the insurance company side. And why is that? Because brokers are waking up to the recognition that they have to be visible,” MacDonald said.
He said traditional search engine optimization (SEO) rewards paid keywords, which insurers buy. Large language models rely less on those signals.
“What they will look at are reviews and blogs and information. That’s all stuff that brokers have produced in the past and continue to produce far more effectively than insurance companies do,” MacDonald said. “If you look at some LLM rankings, broker names come up very high. Why? Because of all that content that’s already there.”
Insurers, by contrast, are now scrambling to build strategies for Reddit, Wikipedia and YouTube after years of blocking bots from their websites, he said. MacDonald also urged brokers to produce more content.
“Have more of your experts, your brokers produce content, video content, advice, referral content, and also customer feedback,” he said.
He said the industry needs that content too. AI tools also draw heavily on Reddit posts from anyone with an opinion, he said, which is why customers arrive at brokerages with recommendations that are sometimes wrong for Ontario or Canada.
Janzen said a little over half of Canada’s personal auto business is already written direct, with a shift of a couple of basis points a year from brokers to direct.
“In our view, customers don’t wake up in the morning and say, ‘I really want to buy direct,’” he said. Customers want ease of doing business, a digital experience and, “most importantly,” value, he said.
Intact writes about two-thirds of its business through brokers, Janzen said. It lets consumers generate an online quote and then passes the lead to a broker, and it has given brokers access to its commercial underwriting tool.
“Brokers need to understand how they’re adding that value and build a niche around it, whether it’s in the community or whether you’re going to have a digital solution that you’re going to try and push,” Janzen said.
Evan Johnston (pictured right), president and CEO of Wawanesa, defended the insurer’s announcement earlier this year that it would explore a direct-to-consumer model, which he acknowledged drew criticism.
“I haven’t heard a compelling argument yet, that is non-emotional, as to why we wouldn’t do that from a business perspective,” Johnston said. “I 100% believe the right way to buy insurance is through an independent broker. Full stop," he added.
He said more personal lines, and possibly some small commercial, could be sold direct in the future, and that Wawanesa is planning for five to 10 years out.
Paul Fletcher (pictured second from left), managing director of Aviva Business & Broker Distribution, said Aviva’s direct book is small, at about 2% to 3% of its personal lines business, and that it uses it selectively to stay close to consumer behaviour. He said the shift toward direct is real, but that most customers are served by brokers.
“I suspect you’ll see a little bit more ebbing, and a bit more flowing, and a bit more ebbing over time,” Fletcher said.
Matthew Turack (pictured second from right), group president and chief operating officer of CAA Insurance, questioned the industry data. CAA sold only direct from 1974 until it opened to broker partners in 2016, he said, and brokers now account for more than half of its portfolio, but industry statistics still label CAA as entirely direct.
Read more: Soft market to last through 2027 as Aviva sees contractor losses rise
“I don’t necessarily believe we’re seeing that big of a shift,” Turack said. CAA offers the same product and price through both channels, he said.
MacDonald said Definity, which launched the direct brand Sonnet, took what it learned and built technology to give brokers the same real-time capabilities. He said consumers still turn to people at the point of sale.
“They want to do a lot of research themselves, but when it comes time to buying, they want to talk to a human, and that’s really where you come in,” MacDonald said.
