The digital revolution has accelerated in recent months with the emergence, development, and growing power of technologies like Artificial Intelligence (AI), robotics, Internet of Things (IoT) and Blockchain. The rapid application of these technologies coupled with a ubiquity of mobile interfaces has created customer-centric value propositions beyond what could be previously obtained. The provision of new consumer experiences and the reduction in their costs is reshaping and transforming customer expectations.
Until now complex regulations, the need for experienced and skilled underwriting and large capital reserves have been a deterrent for entry to the insurance sector. These borders go some way to explain why the insurance industry lags behind many other sectors in its digital maturity. However this is beginning to change and evolve.
With the speed of innovation arising in other industries, the emergence of InsurTech organisations, incubators and labs, and elevating customer expectations, the insurance sector borders are being reshaped, blurred and broken down. As a result insurance companies will start to come under threat from organisations and industries they perhaps never previously viewed as competitors.
It is envisaged that this future environment will play by new rules, require different capabilities, and rely to an extraordinary extent upon data. It will be critical for insurers to defend their position but also go on the offensive by seizing opportunities across sectors before others get there first.
This article states that within a decade companies will define their business models not by how they play against traditional industry peers but by how effective they are in competing within rapidly emerging “digital ecosystems,” comprising a variety of businesses from dimensionally different sectors.
The ongoing digital revolution, which has been reducing frictional, transactional costs for years, has accelerated recently with tremendous increases in electronic data, the ubiquity of mobile interfaces, and the growing power of artificial intelligence. Together, these forces are reshaping customer expectations and creating the potential for virtually every sector with a distribution component to have its borders redrawn or redefined, at a more rapid pace than we have previously experienced.