There are really only two ways to deal with changing times. Savvy insurers have been exploring the possibilities of technology and are looking to use it to fight for a larger share. Meanwhile, others in the industry are waiting around, hoping the path of innovation will become clearer and more well-trod.
In all fairness, it is not easy to move away from the age-old value proposition of pooling risk, calculating average pricing and generating gross premium income. It has brought success to the insurers that mastered it, and created a safe environment for society and for innovation.
But like the newspapers and magazines that failed to come up with a digital strategy, or the retailers that couldn’t imagine customers shopping online, insurers can’t simply cut expenses and rest on their past achievements. Other insurers and potential competitors from other industries are waiting to pounce.
Some innovative carriers are developing ways to use the Internet of Things, big data, digital channels, the cloud and artificial intelligence to assess and price risk directly and individually. Meanwhile, Google has entered the insurance sales arena and is poised to compete up and down the transportation chain as a major investor in a taxi-alternative service, a major developer/tester of autonomous vehicles and possibly its own autonomous-vehicle taxi service.