Customers are getting so much more from the insurtech market, but how will traditional insurers keep up?
The insurance industry has the potential to be highly disrupted from transformative forces. Sharing economy enables owners to utilise spare capacity, approximately USD 335 billion by 2025. New entrants are continually squeezing insurers.
Generally, consumers are dissatisfied with the number of questions they are expected to answer and the time it takes to get insurance coverage. Data analytics can pre-populate this information thereby making the process much faster. Social media usage has created an explosion in big data. There are unlimited opportunities for insurers to identify unmet coverage needs.
New business models are beginning to emerge. Changing customer expectations are transforming the industry from within.
Peer-to-peer (P2P) insurance allows group members to pool their risk online. This is similar to mutuals, just more digital than a traditional mutual company.
New entrants are testing the boundaries of insurance. On-demand (or episodic) insurance – pay-as-you-go consumption – is growing. Insurers will need to re-think how to design and underwrite products as on-usage insurance could become the norm for the customers of the future (the “Boss Baby” generation).
