Insurance is one of the last industries ripe for disruption.

Until the rise of fintech insurance companies were comfortable with the status quo and no-one has been prepared to challenge how things were done.

Other industries have endured a comparatively straightforward, yet rocky digital transformation where products and services could easily be digitised, such as videos, books and music.

The insurance world’s taste of ‘disruption’ simply amounted to attempts to make the industry’s operations more efficient.

But future changes in customer behaviour and technology developments could lead to an insurance market that’s radically different from today’s.

Why’s the insurance industry not yet been disrupted?

This has been for a variety of reasons, probably the most obvious being the world of insurance is complex to grasp.

With its own jargon and processes it makes it harder for those from outside the industry to penetrate and disrupt.

Then there’s the tough regulation on every product sold and the fact it’s tough to get funding.

As a result it’s been very difficult for newcomers to create something entirely new.

If entrepreneurs were to try to launch a product, it’s not simply a case of time and money – they could possibly face prison without regulatory approval.

Where are we now then?

Insurers are currently benefiting from technologies including artificial intelligence being used to help detect fraud and chatbots dealing with quotations and basic customer service enquiries.

With the advancement of the Internet of Things (IoT) insurers will have an even more array of powerful tools at their disposal.

So what areas are showing signs of disruption already?

Peer to peer insurance

Peer-to-peer insurance models are increasing in popularity. Small groups of users are rewarded with cashback bonuses at the end of each year they remain claimless.

Companies such as Germany’s pay part of their customers’ premiums into a cashback pot.

If nobody claims throughout the year, members of the group get some of their money back.

Whereas if someone does claim the cashback decreases for everyone.

Small claims are settled with the money in the pool.

Peer to peer insurance could prove a threat to traditional insurers as if consumers switch there could be a reduction in demand for general insurance but no corresponding lack of supply – leading to lower premiums.


Mobile needs to be one part of a seamless, omni-channel experience.

But the benefits to customers are clear if they’re able to research, buy and manage from wherever they are.

Huge gains can be made if insurers make the claims process effortless.

Insurers can take advantage of mobile technology by allowing policyholders to photograph or video damage and submit claims from their handset.

Not so easy from a desktop computer …

Engagement is also a key factor and insurers can drive this with cleaner user interfaces – just look at the success of US based Lemonade.

Utilising data from telematics and the Internet of Things

Insurers will benefit from a wealth of third-party data from the Internet of Things (IoT), social media, drones, weather forecasts and more.

This will prove invaluable to underwriters and claims staff.

Utilising their ‘big data’ insurers can provide better pricing and underwriting and ultimately have a clear advantage over their competitors.

The adoption of telematics in cars will increase as consumers accept the benefits.

Health and home insurance based telematics will also develop as customers become more comfortable with their behaviour and data being tracked in exchange for more favourable premiums.

The sharing economy

The growth of companies like Airbnb and Uber has created a whole new market for insurers.

New and bespoke insurance products will be needed that reflect the shared risk between homeowner and renters to ensure everyone is adequately protected.

A good example of bringing consumers together is the start-up Bought By Many which acts as an intermediary to negotiate better deals with insurance companies for large groups of customers with niche needs, for example diabetic travellers.

Self-driving cars

The car insurance world is soon going to get far more complicated as self-driving cars take to the roads.

But insurers who make use of telematics data will be better prepared to better understand the risks.

However, they could face a battle if the digital big boys enter the industry.

Google, Amazon or Apple could leverage their vast amount of customer data to offer tailored insurance at competitive prices.

Insurers must be ready to compete in massively different markets.

Many insurers will undoubtedly struggle with where and how to innovate and those too slow or reticent to act will eventually struggle to compete

Those quick off the mark will grab their share of the market and ready themselves for any further developments in the industry.

While some insurtech start-ups might die out there’s no doubt they will teach insurers about how to meet customer needs and expectations.