UK insurance brokers may be underestimating the scale of disruption that artificial intelligence (AI) could bring, despite mounting evidence that clients are increasingly open to AI-driven services.
GlobalData’s 2025 UK SME Insurance Survey showed that the majority of small and medium-sized enterprises (SMEs) are comfortable with AI assessing their insurance needs and recommending cover options.
The findings also point to a growing willingness among businesses to engage with digital tools that promise speed, efficiency and tailored outcomes.
By contrast, brokers appear far less concerned. GlobalData’s 2025 UK Commercial Insurance Broker Survey found that only 5.2% of brokers view AI as the biggest threat to their business. More cited competition from other brokers (13.2%) or direct insurers (11.2%) as their main concern. Adoption is also limited: just 5.9% of brokers currently use AI-driven policy recommendation tools, while 78.6% say they have no plans to adopt them.
The gap between SME expectations and broker readiness is striking. Analysts suggest it could mirror earlier market shifts, such as the rise of direct insurers in the 1990s and online price comparison sites in the 2000s. Both developments were initially downplayed by brokers, yet each reshaped distribution models and intensified competition.
AI could follow a similar trajectory, but with far faster consequences. Industry observers note that SMEs are already more digitally native than in previous decades, which could shorten the adoption cycle.
As early as the next three to five years, insurers and intermediaries that embed AI into their processes may begin to take noticeable share from those still relying on manual or traditional models.
If current trends continue, brokers who do not integrate AI risk seeing their relevance diminish within a decade. This could manifest in shrinking margins, reduced client retention, and a greater shift of SME business towards technology-led providers offering lower costs and more responsive service.
While brokers may not yet perceive AI as the primary competitive threat, the data suggests that the timeline for its impact could be shorter than many expect.
