Look at any conference programme for the year ahead and you will find the word 'disruption' appearing on almost every agenda. But what does disruption look like in the insurance sector?
We explore what's truly different-¦
Uber, Airbnb, Amazon and Google -- all household names that simply did not exist a very short time ago.
We have got used to doing business the Amazon way, we no longer hail a passing cab but look to our phones and have got used to travelling the world without the help of a travel agent.
But can such disruption truly come to the insurance market, where the client is paying for a promise and where regulators have introduced a massive number of rules and regulations designed to protect customers and their money?
Late last year came news that should have sent shivers down the spine of insurance strategists the world over: Amazon started recruiting insurance professionals in London to join a new team looking to disrupt the insurance market in the UK, Germany, France, Italy and Spain. GlobalData, a data and analytics company, broke the news, explaining that Amazon provides transparent services such as the ability to track a package, next-day delivery, a clear returns policy and customer reviews on products, providing clear communication to customers throughout the purchasing journey.
Translating this to the insurance market, Patricia Davies, financial services analyst at GlobalData, says: "Amazon has a positive reputation for putting customers' needs at the heart of its propositions. This level of trust is something the insurance industry has really struggled with, especially after the likes of the PPI scandal."
Worryingly for traditional insurers -- and according to GlobalData's 2017 General Insurance Survey -- 18% of consumers would buy their motor or home insurance from Amazon.
Ms Davies explains that the company's investment in technology has brought households the Echo and Dot, voice-activated speakers that use artificial intelligence to support everyday needs.
Ms Davies adds: "If insurers are not careful, they may be pushed out of having a direct relationship with customers and will be relegated to the role of a price-driven risk carrier at the back end. Either way, this is a sure sign disruption is on the way for the UK insurance market."
Roll on just a few months and it seems Amazon may not be the only company in the game.
Buzzvault, which claims to be the world's first asset vault to be built on the blockchain, has secured a long-term strategic partnership with Digital Partners, a Munich Re business unit.
Buzzvault insurance will launch in Q3 2018 as a personalised home insurance policy available to consumers based on a digital inventory of their home contents. It says this "game-changing new home insurance proposition will address the chronic problem of underinsurance in the home insurance market by leveraging customer data and video survey technology to provide a seamless, frictionless customer journey -- from application through to claim".
The idea is that customers will digitally catalogue and securely store details of their possessions through an app. The customer can then view an accurate, verified record of all their belongings and obtain a valuation of what they own. This information can be updated with receipts and warranties as new items are acquired, ensuring the total value of the contents data remains truly reflective of current market worth.
The company claims that, rather than needing to complete a lengthy and complicated application for insurance, the key data on their home and contents will be prefilled.
Becky Downing, CEO of Buzzvault, says: "We're on a mission to fix the broken home-insurance market. Home insurance has been dysfunctional for too long, insurers have not known what they are insuring and this leads to a poor, painful experience when it comes to a claim.
"We will know exactly what we are insuring, eliminating the risk of underinsurance while promising customers a transparent, speedy claims service should they need to make a claim."
Disruption is well and truly on its way -- is it time for traditional insurers to re-evaluate their approach?
According to the Digital Insurance Agenda, insurtech companies have four things in common:
1: They are always part of their customers' life
Fast changing customer behaviour and new market dynamics make it essential for insurance carriers to increase the contact frequency and provide more added value in these contacts.
2: They continuously build contextual ecosystems
Adding value is about solving the real problem. People don't want a mortgage; they want a nice house to live in. Insurance is usually part of a solution, but rarely the entire solution. Insurers need to become more part of the context, and of the ecosystem of companies and organisations that play a part in that context.
3: They act 'simply human'
With all sorts of new technologies being applied to digitise processes insurers run the risk of neglecting the feelings side of customer engagement. People crave organisations that are human. The solution is to create 'the best of both worlds'; to leverage technology to empower front liners.
4: They strive for operational excellence
Digital transformation to improve operational excellence will continue to be top of the agenda in the years to come. And rightfully so. Yet, at the end of the day, digitalised processes and a lower cost base are table stakes. Operational excellence is essential, but it also a qualifier, not a winner. Engagement innovation needs to be built on top. This is where the previous three essential elements kick in.