Our time is up. We need
to face some hard facts.
Profound change is upon
us. Silicon Valley is targeting insurance; investing
and creating partnerships
to disrupt our industry.
At SMA, we have been
presenting our research
and framework around
becoming a Next-Gen
Insurer to various business
and IT leaders. Our
message to the industry
reflects fast-paced change
and shifts in strategies,
planning, and investments.
In November, I attended and presented at the
Silicon Valley Innovation
Center’s (SVIC) Insurance
Disruption conference in
Palo Alto. What I witnessed, heard, and felt was confirmation
of the seismic change rumbling beneath our industry. The event
included presentations from economists, VC firms, start-ups
specific to insurance, and insurance innovation labs. Without
exception, all confirmed that the energy of change is real, and
disruption is seeping into insurance.
Let’s face it, the insurance industry has weathered natural
and man-made catastrophic financial recessions, the depression, and wars. Throughout the industrial revolution—and even
the Internet revolution—the insurance industry has continued
to evolve and mature. But this time—right now—the digital
transformation is taking hold across all industries. Insurers
cannot and should not ignore, much less avoid it.
The following are some observations from this amazing
event:
K The amount of money being poured into start-ups related to
both insurance and technology will reach a record-breaking
$2.2B this year. This includes about 12 insurance-only-fo-
cused VC firms. Some insurers and reinsurers are making
big moves to get in the game. Examples include Munich Re,
AXA Labs, and more, with several building significant part-
nerships and solutions with Facebook, LinkedIn, Google,
and many more leading-edge companies.
K As an industry, we continue to have limited growth across
most lines and sectors and our financial strength is waning.
Today, our growth rate in the U.S. is slower than the U.S.
economy and our contribution to GDP continues to dip.
Traditional insurance products are becoming commod-
Put on Those Thinking Caps
A visit to Silicon Valley should inspire business and IT leaders to rethink the
business of insurance.
By Deb Smallwood
As an industry, we continue
to have limited growth across
most lines and sectors and our
financial strength is waning.
Today, our growth rate in the
U.S. is slower than the U.S.
economy and our contribution
to GDP continues to dip.
