Do you want to know the names of the next Giants in the insurance industry? If you know where to look, you can already see some of them.
The inevitable change
The insurance industry will very soon undergo a huge shift, a structural and business transformation. Those who believe that things will just continue dragging along: a never-happening complete digitalization, postponed or non-existent reaction to rapid and massive social and technological changes, small digital initiatives aiming to calm down shareholders and so on – might be in for a surprise. The industry might think it is too old, too complex, too important or well, simply huge, to be shaken by anything. But smart leaders realize the meaning behind the phrase “History repeats itself”. In the last 20 years we have seen giants disappear and new companies grow tremendously becoming the new giants of our age. Industry might be different. The story will be the same.
Smart existing insurers can persevere
Of course, as in other industries, large companies, which are aware they need to change: their processes, their products, but most of all their mindset, will continue being successful in the new age. In some cases, their business will have to change significantly for them to persevere. Some giants, however, will have waited too long, or their partial (not whole-hearted) efforts will not have been enough and we will surely see some of the best known insurance brands shrink, get acquired by the new big players or simply become insignificant.
The new players
But besides the smart existing insurance company that will embrace change and survive, there is another type – currently flying completely under the radar, which will be the insurance company of the digital era. The new Number One. The digitally born insurer.
Ok. So I am not talking about one company in particular. Actually, there is going to be a wave of new insurance companies, which will very quickly enter the market, grow and change its structure dramatically. And since I told you, you can already check out some potential new Giants, let us have a look at two types of insurers with this potential.
From the industry
On every market there is a list of companies licensed to do insurance. People like to look at the top of that list – the top grossing companies, the currently biggest insurers. My advice: Look further down the list. Look at the bottom. Small insurers, newly licensed companies or spin-offs / daughter companies of larger insurers are new insurance players, which come from the industry, but have the flexibility to take action right away. Exactly such type of companies can build their entire business from scratch on a completely next-generation, fully web-based and cloud oriented solution, which has the capabilities to support a 100% online insurance process, as well as take advantage of IoT and AI capabilities. Consequently, these companies will be able to create new products and apply technologies, which the big players can’t adopt so efficiently due to technical limitations.
2. From other industries
We will see more and more successful companies from other industries, entering the insurance market. These players do not have an insurance background, but have a lot of resources and capital, thus the high-barrier entry is actually not that high at all for them. And who can better create the insurance products necessary to address new market needs than companies, which are at the frontier of social and technology changes.
These new insurance players won’t beat the old insurers in their game. They will change the rules of the game, focusing on the end customer, deconstructing insurance and building it again, leaving out the unnecessary complexity and inefficiency. Not only is there going to be a wave of new giant insurance companies, we will also witness the emergence of entire new industries based on the digital insurance era.