The high-level forces (people, technology and market boundaries) are responsible for insurance’s driving influences — new expectations, innovations and new competition that individually exert tremendous transformation pressure on the industry. The forces don’t operate in isolation, however. They are connected and combine to create an even more powerful and disruptive impact on the industry. Majesco developed a model to reflect these forces:
The combined impact is creating a powerful market shift that brings the three together, creating unprecedented innovation and disruption. It reflects what author Malcolm Gladwell calls a “tipping point.” A tipping point occurs when an idea, trend, behavior or expectation crosses a threshold and spreads like wildfire, changing the fundamentals of business. These are often sudden, as we have seen in other tipping points over the last century, reflected in the move from the industrial age to the information age and now to the digital age. Each move created leaps in innovation and transformation.
The makeup of the market is shifting. Insurers who ignore the shift will be challenged to retain their customers, let alone grow their businesses. This shift is being driven by demographic, cultural, economic and technological forces. They present new challenges and opportunities for the insurance industry that will require insurers to rethink their strategies, products, channels and processes to reach a fast-changing market.
The combination of the sharing and platform economy trends is dissolving traditional boundaries and the long-held competitive advantages of incumbents. Just as start-ups can now access technology as a service, they can also access resources (sourcing and crowdsourcing), designing, manufacturing and more as a service, giving any company access to the resources needed to compete. As a result, companies must compete on more than brand, product, price or distribution. They must compete on innovative approaches.
Shifts in the Industry
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