Portfolio Manager Insights

AI may reinforce the value of insurance brokers

With high-growth AI stocks dominating investors’ attention, Fidelity’s Nicole Abernethy is finding value among insurance brokers, where she sees opportunity rather than disruption.

By: Nicole Abernethy
Updated: 8/17/2026
  • Fidelity Portfolio Manager Nicole Abernethy believes artificial intelligence will enhance – not replace – the essential role of insurance brokers, creating an opportunity to invest in what she considers undervalued firms that provide critical expertise, advocacy and client support.
  • “While it’s true that insurance brokerage stocks have lagged growth-oriented pockets of the market amid concerns that AI could erode their business models longer term, I believe these fears are misplaced, creating attractive entry points into strong companies,” says Abernethy, who manages Fidelity® Select Insurance Portfolio.
  • In helming the industry-focused equity strategy, Abernethy targets firms she views as mispriced, particularly those with solid or improving returns and long-term growth potential that is not fully reflected in their valuations.
  • Critics argue that AI could render brokers’ core function less essential by helping customers assess their own coverage needs, but Abernethy disagrees.
  • “I have a different view, in that insurance can be an existential, complex and high-stakes decision for a business trying to mitigate serious risk,” she explains. “As a policyholder, you want to feel confident that your broker can be an effective advocate for your needs, and I don’t see AI matching these trusted advisors in that regard anytime soon.”
  • Moreover, Abernethy cites brokers’ critical roles in distribution, claims support and client service, noting that they remain essential beyond policy placement, particularly when customers are navigating a claims event.
  • “In short, insurance is a complicated, highly regulated market,” she underscores. “While AI will undoubtedly drive efficiencies, it’s equally apparent to me that insurance-related decisions carry significant risk when made incorrectly. As such, I believe insurance brokers continue to offer customers a compelling value proposition.”
  • Abernethy cites Arthur J. Gallagher, an insurance broker with meaningful exposure to middle-market customers, as an illustrative top-10 holding in the fund at the end of July.
  • She notes that because of the company’s scale in this segment, it can leverage differentiated data and insights, along with its established position with insurance carriers, strengthening its ability to help customers manage risk.
  • “The bottom line is that while AI will undoubtedly influence the industry, I do not believe it will be a viable substitute for insurance brokers that provide what technology alone cannot replicate: expertise, trust, advocacy, compassion and service,” she concludes.
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Fidelity Select Insurance Portfolio (FSPCX)

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