Insurers' digital reality--fewer premiums, more competition

Incumbents should consider partnerships and find new value-added services. For a long time, insurance proved resistant to digital technology's disruptive power. Complex regulation, the capital reserves required to underwrite insurance, and underwriting skills and proprietary data built on years of experience kept the industry protected. But these barriers are rapidly eroding. For the most part, the main threat is not from insurtechs, the nimble new tech start-ups that have thus far focused on property-and-casualty (P&C) insurance, as well as marketing and distribution, and into which venture capitalists have poured $4.4 billion in the past two years.