Remember the must read book "Unleashing the Killer App: Digital Strategies forMarket Dominance" by Larry Downes and Chunka Mui? I was luckyto get a signed copy at a Diamond Technology Partners event andhear them speak about the killer app. It was in 1998, the start ofthe eBusiness revolution, with the emergence of the Internet as aplatform for a new business model. Every company was holdingexecutive management strategy sessions discussing the book andbrainstorming. In the insurance industry, many were putting uptheir first websites and beginning to think about eBusinessopportunities that could become their "killer apps."

Many insurance companies failed in this effort. Their visionwasn't big enough. Their desire to upend existing models wasn'tstrong enough. Rather, they thought incrementally and reservedly.This resulted in strange hybrid solutions, such as websites with nointegration to backend systems. Requests were printed off andmanually put into the systems. Many companies wasted time onvaporware ideas that never got off the ground due to organizationalangst or a lack of leadership. It was an exciting and painful timeas we recalibrated our thinking toward an entirely new era ofbusiness. In spite of our efforts, we fell a lap or more behind inour race toward innovation.

But some companies succeeded. Think about Esurance and Homesite,startups who understood the opportunities and launched theirbusinesses around this time. These companies exploited the dramaticchanges introduced by the Internet and challenged one of thelong-held business assumptions, that agents were required to selland service insurance with direct to consumer models. As a result,they emerged as formidable, innovative companies.

Do established insurers have another chance to stay inthe race?

Recently, I read the follow-up to the first book titled,"The New Killer Apps: How Large Companies CanOut-Innovate Start-ups," and another titled, "Billion Dollar Lessons," both by Chunka Mui andPaul B. Carroll. Interestingly, the new book takes a view thatdecades or century-long established companies can out-innovatetoday's start-ups, many of whom are considered Unicorns, a pre-IPOtech startup with a billion dollar market value. These startups andunicorns have emerged in the last few years with real businessmodels, real revenue, real customers and massive valuations unlikethe first Internet boom — think of Uber, Airbnb, Snapchat, SpaceX, andPinterest.

(Image: Shutterstock.com)

Even more compelling for insurance, is the rapidly growingintensity of change being influenced by these companies. ConsiderUber and the impact on auto insurance, Airbnb and homeowners insurance, or Snapchat'snew payment options.

The authors are quick to point out what we should all recognize,that being big AND agile is essential in today's rapidly changingworld of converging technology innovations including mobile, socialmedia, sensors, cameras, cloud and emergent knowledge. Theyestimate that more than $36 trillion of stock-market value is upfor "re-imagination" in the near future — meaning that eitherexisting companies reimagine their business and claim the marketsof the future or the alternative may happen and they may bereimagined out of existence!

Related: Insurance needs technology: Here's how to move theneedle starting today

When they compared successes and failures of establishedcompanies, they found that successful companies thought big,started small and learned fast. Failures commonly missed on one orall of these points. Is the insurance industry thinking big enoughyet? Are they innovating by starting small? And are they learningfast by experimenting, testing and learning from failures?

The only way insurers stand to catch up in a race where thetrophy is not just success but also survival, is to out-innovatethe competition, including the new competition from outside theindustry looking to disrupt insurance. It's possible, but it isgoing to require both wise technology investment and a whole newinsurance business model mindset.

Editor's note: This blog post first appearedat Majesco.com. 

 Denise Garth is Senior VicePresident Strategic Marketing at Majesco,and is responsible for leading marketing, industry relations andinnovation in support of Majesco's client centric strategy, workingclosely with Majesco customers, partners and theindustry. She is a recognized industry leader with bothP&C and L&A insurance experience as a CIO and businessexecutive with deep international ties in Asia and Europe throughher ACORD leadership role.