Artificial intelligence is changing how people discover and question protection products. For insurers and advisers, the opportunity is real: AI can prompt consumers to consider life and income protection earlier. The challenge is that AI can also deliver confidently worded but inaccurate or incomplete guidance.
AI’s Potential to Close the Protection Gap
Searchable AI tools and chat assistants increase product discoverability and push customers from being “sold, not bought” to actively researching options. The Mills Review highlighted consumer inertia in protection markets, and UK data show only about 30% of people hold life cover. AI can surface unmet needs and explain basic product features, helping close that protection gap when it points consumers to relevant products or to speak with an adviser.
The Growing Risk of Misinformation
Large language models often present information with high confidence. That style makes it hard for lay users to spot errors. Common failure modes include hallucinations, outdated training data, and incorrect inputs from the user. For example, a consumer using ChatGPT may receive a plausible but wrong claim example, or misinterpreted exclusions, and act without verifying. Over-trust in AI outputs can lead to poor purchase decisions and regulatory concerns for firms and the Financial Conduct Authority.
The Indispensable Role of Human Advisers
AI is effective as an educational tool and for broad scoping. It cannot reliably interpret personal medical histories, family circumstances, future earnings potential, or nuanced underwriting criteria. Human advisers remain essential to validate AI output, apply judgment, and deliver personalised recommendations. Insurers should pair AI-driven discovery with clear signposts to human review, transparent sourcing, and escalation pathways that require adviser verification before sale.
The balanced path for the sector is hybrid. Use AI to raise awareness and lower friction, but preserve human oversight at decision points that affect customer outcomes. That approach can help narrow the protection gap while managing misinformation risk and meeting FCA expectations.
