Stagnant, slow to adapt, anti-innovation—these are some of theterms often used by industry insiders and outsiders to describe theP&C insurance space (the world of auto, home and businessinsurance).

It is a convenient punchline, but a little overused andexaggerated in my view. It's true, many insurers have more to do inorder to capitalize on the latest consumer trends and adopt the newest technologies. Manynon-insurance companies have a lot to do as well. The situation isnot as dire as I hear from other commentators and there are severalexamples to demonstrate how responsive the industry has been torecent changes in the modern economy and technology landscape. Iwould like to point out a few:

• Response to ride sharing has been swift: Manyauto insurers have been actively following the progress of Uber andits competitors and have been relatively quick to create solutionsfor their ride-sharing drivers/customers. Remember, this is a newtype of risk—there is still not much data to entirely understandthe loss experience. However, it seems that every month there iseither a new insurer offering a novel coverage solution or anexisting player is expanding into new state.
• Drones to the rescue: Several insurers haveannounced plans to test this technology for use in the claimsprocess, as there is potential to make it more efficient and safer,notably in situations where a catastrophe or extreme weather hasoccurred. This is cutting edge technology that the private sectorhas only recently been able to leverage.
• Google Glass may have found its place:Speaking of the claims process, while this technology seems to havefallen out of favor among consumers, some insurers are exploring its use among claimsadjusters. Insurance professionals can more effectively recordand transmit accident information, creating a more seamlessexperience.

(Image: Shutterstock.com)

• Fostering innovation: Several insurers areattempting to harness cutting edge technology through investing orpartnering with startup technology companies. Instead of trying tobuild an internal organization, some have created venture funds orforged alliances with those outside the industry to capitalize onemerging trends.  
• Driving behavior-based pricing: Telematicsand/or usage based insurance (UBI) has been with us for some timenow (relatively speaking) and there has been a great deal ofdiscussion in the industry on this topic. But I still find this tobe a remarkable innovation, as applied to both personal vehiclesand commercial fleets. It will continue to revolutionize theinsurance rating process but also offers opportunities in otherfacets of the insurance value chain as well as integration withnon-insurance entities.
• Creative marketing: Remarkably, the mostinteresting and memorable advertising campaigns are often producedby auto and home insurers (GEICO, Progressive, Allstate, Esurance,State Farm, Nationwide). The ability to capture mind-share amongconsumers and businesses is not an easy task. However, manyinsurers have demonstrated an ability to bring insurance to theforefront of consumerism. Aside from TV, we are also seeing moredigital creativity online and through social media platforms.Insurance is not something we easily gravitate towards so marketingcreativity and distinction is important. 

[Related: Welcome to the future: 8 ways that digitalinnovation is reinventing insurance customerservice]

The reality is that the insurance industry is a different animalfrom many of its brethren in the economy. The state-basedregulation framework can create limitations (an understatement tosome); insurance is an intangible product that requires a good dealof consumer education; and the cost of the product is difficult tocalculate precisely as expected losses are actuarial estimations.Even in light of this, the industry has demonstrated an aptitude toadapt and work to be forward thinking.

(Image: Shutterstock.com)

So what lies beyond the horizon? There are several catalyststhat will likely move the "insurance needle" further. One arearevolves around cyber/data breach risk. This threat is not goinganywhere, and in fact, is growing day by day as we become moredigitally connected and feel more comfortable sharing informationin the cloud or online. As cars, homes and businesses become morecomputerized and host larger amounts of first and third party data,consumers and businesses will be exposed to more risk in all facetsof their digital lives. The insurance industry is already makingstrides to address this, but I believe the best is yet to come interms of creative and value-added solutions.

[Related: 5 disruptors that could turn the P&C industryon its head]

Secondly, I believe that we will see more P&C insuranceofferings integrated or bundled with non-insurance offerings. Asmore non-insurance entities gain larger quantities of data onindividuals and businesses, they can serve as conduits tounderwriting new or existing risks for insurers. 

Opportunity for unique insurance solutions

Finally, there's an opportunity for insurers and agents to workmore closely with consumers and businesses on developingunique/specialized insurance solutions. Customers are becoming morewilling to contribute data to third party entities—this provides agateway to build a closer relationship with clients adding morevalue and increasing retention in a very competitivemarket. 

We have all heard the refrain before—"the world is changingrapidly." Insurance professionals are working hard to adapt andperhaps it's time to acknowledge these laudable efforts. It may betime to let up a little on the punchline that the insuranceindustry is "painfully slow moving" in light of some excitingdevelopments by many companies and what is on the horizon.

What do you think?  

Please feel free to reach out to me at [email protected] or comment below. 

Neil K. Rekhi is the founder of Premium Intel,which provides market intelligence and insights focused on theProperty and Casualty (P&C) marketplace to support strategicanalysis and decision making.