While technology continues to insinuate itself into all facets of financial services with an exponential rate of change, the insurance industry, in contrast, faces a slow-motion parade of promise, possibilities, prematurity, and pared-down expectations.
Multiple factors are changing (and will continue to change) the insurance industry in a material way:
- The birth of insurtech
- Machine intelligence, which incorporates multiple tools to explore and exploit data
- Collection and curation of more structured and unstructured data
This article describes, from a large (re)insurer’s perspective, the trends and challenges related to how technology and society’s digitization are irrevocably changing risk markets and insurance. An interesting case in point is the first wave of unsuccessful attempts made by technology firms to disrupt the insurance industry in recent years.
Based on the described trends, I will suggest one nuanced response to the question of whether insurance is being disrupted and/or transformed, while highlighting the trends in the insurance industry catalyzed by society's digitization.