Digitally-driven change in the insurance industry-- disruption or transformation?

While technology continues to insinuate itself into all facets of financial services at an exponential rate of change, the insurance industry, in contrast, faces a slow- motion parade of promise, possibilities, prematurity, and pared-down expectations. Digitization, the birth of insurtech, machine intelligence, which incorporates multiple tools that explore and exploit data, and the collection and curation of (orders of magnitude) more structured and unstructured data are changing (and will continue to change) the industry in material ways; and not always in line with specific predictions but with developing general capabilities that are fairly predictable. An interesting case in point is the first wave of unsuccessful attempts made by technology firms to disrupt the insurance industry in recent years. This article describes, from a large (re)insurer’s perspective, the trends and challenges related to how technology and society’s digitization are irrevocably changing risk markets and insurance. Based on the described trends, I will suggest one nuanced response to the question of whether insurance is being disrupted and/or transformed, while highlighting the trends in the insurance industry catalyzed by society’s digitization.