While the insurance industry has remained much the same for morethan a century, the status quo cannot endure.
Established insurers have been able to slide by with incrementalimprovements, but new entrants are demonstrating that approachisn't enough anymore.
Three of the biggest drivers of change to the industryinclude:
|- Customer expectations – Customers expectconvenience and transparency, and have greater ability to find itthan ever before.
- Pace of innovation – So far, incrementalinnovation has helped insurers meet most new customer expectations,but it hasn't been enough to adequately address the shared economy,usage-based models, and/or risk prediction. In this context,customers have a need for new insurance solutions, but incumbentsare struggling to provide them.
- Start-ups – New, lean players that have theability to innovate quickly — notably InsurTech innovators— are taking advantage of the opportunity to fill the gapsthat incumbents have not.
Technology levels the playing field
Established insurers traditionally have had an advantage overprospective newcomers of being able to leverage many years ofdetailed risk data. However, much data now can be captured in areal-time, innovative way and is available from external sources.As a result, there are new market entrants that have the ability togenerate meaningful risk insights in very specific areas using newdata sources. This will positively impact a business that mainlyrelies on data to understand and manage the risk.
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