In my previous two posts, we’ve looked at the first two dimensions of competition in the insurance industry—the X axis (how we sell) and the Y axis (what we sell). In this post we’ll look at the third dimension—the Z axis (who is selling).

Insurers, due to regulatory hurdles and existing infrastructure, used to compete on the X and Y axes, on sales channels, and products and services. The range of options there may have changed, but those two axes are still the generally expected and understood areas of competition. The real disruption to the industry, however, comes from the Z axis: Who will be selling and providing insurance in the future?

We have seen this axis come to the forefront in other industries. For example:

  • Blockbuster has been shut out, first by Netflix, and later by various video streaming solutions.
  • Amazon and its brethren have overtaken retailers.
  • Uber has eaten a share of the taxi market pie.
  • Airbnb is competing directly with hotels.

In each of these cases, the unique services or experiences of new competitors have threatened not only market share, but created new market demands that the initial market needed to respond to in order to compete.

Z Axis: Who is the provider?

Insurers’ new competition can come from any of these:

  • Fintech investments creating new marketplaces.
  • New insurance marketplaces such as Coverhound.
  • Companies such as Lemonade preparing peer-to-peer insurance models.
  • Manufacturers of new products moving into insurance, such as Beam Technologies, who are offering dental insurance tied to their IoT toothbrush.

As insurers develop digital strategies to respond to the emerging disruptors and threats in the industry, they must consider all three dimensions of competition: new channels, new products/services/solutions and most of all new competitors.

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