The Future of Insurance

Changing client needs are transforming the insurance industry.

New opportunities to serve insurance clients are arising through advanced technologies appearing across the economy. Many innovations have insurance industry applications, such as using drones to assess property losses. “Insurtech,” the moniker for the industry’s use of technology to achieve certain outcomes, will not necessarily replace existing providers, but it will enable greater efficiencies for serving clients. Some of these developments will disrupt central insurance functions, like actuarial risk modeling or the claims process. And long-entrenched business structures, such as agent and broker distribution, also could give way to digital tools.

Emerging insurtech companies are exerting significant pressure on the industry to adapt. Some new entrants are developing products for incumbents to gain efficiencies in an effort “to be faster, nimbler and more flexible in serving the insured.” Some insurtech firms, like Lemonade, are competing directly with established carriers to offer products to consumers. The insurance sector, though, is undergoing...