New breed of insurance industry challenger emerges in shifting competitive landscape: SMA brief

A new breed of industry challengers are coming from technology and Silicon Valley companies to test insurers’ historical views of competitors, suggests a research brief issued Tuesday by Strategy Meets Action (SMA).

There have been numerous articles and blogs regarding the potential of companies like Google, Apple, Amazon, eBay and other technology companies entering the insurance space, fuelling speculation, concern and even fear, SMA notes in a statement announcing the release of The Shifting Competitive Landscape: A New Breed of Industry Challengers.

“New challengers may not compete directly by offering and underwriting insurance. These challengers are competing in new ways to capture customer relationship, loyalty, pocketbook, and much more through innovative offerings, engagement and business models,” notes Denise Garth, a partner with the SMA, which provides business and technology insights, research and advice to insurers and IT solution providers.

“These challengers have key business attributes that illustrate the distinctions between themselves and insurers – business attributes that are fortifying the challengers’ rapid growth and influence,” Garth suggests. “Furthermore, each of these challengers is rapidly developing new and innovative capabilities that continually reshape, transform, and enhance customer engagement and experience,” she adds.

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Among other things, the report highlights and discusses the following issues:

• identification of key attributes of 10 challengers and the implications for insurance – particularly since a growing number of customers are willing to consider buying insurance products from organizations outside insurance;

• tactics that these challengers are likely to use to challenge insurance, leveraging their capabilities, customer relationships, reach and influence to establish a new generation of program business; and

• key implications and questions to help insurers rethink their strategic visions and business models.

The report suggests that the insurance leaders of tomorrow should be asking: How can we connect, educate, inform and enhance our customers’ lives or businesses through innovative offerings that provide meaningful value in helping to eliminate, reduce or manage risk in a world of changing risk?