19December 2018Back to the Future: 100 Years of DisruptionBy Marik Brockman, VP, Strategy & Partnerships, CSAA Insurance GroupWhen you're sneaking up on your 105th birthday, it's probably fair to say that you have seen a few changes in your time. In 1914, CSAA Insurance Group, the AAA insurer for 23 states and Washington, D.C., was founded by a small group of auto enthusiasts looking for an innovative solution to the high price of auto insurance. They created their own insurance company. Fast forward to 2018: The state of marketplace innovation and business model disruption is breeding a seemingly infinite number of startups across every industry, including retail, finance, transportation, and, of course, insurance. With few exceptions, every new idea purports to shatter the status quo, and deliver products or services better, faster, and cheaper. Hundreds of InsurTech startups populate the competitive landscape, making it feel as if dozens more emerge every month. These innovators are attacking different areas of the insurance value chain and unbundling insurance in the process. But why is this happening? What are the micro and mega trends behind these new opportunities? Mega Trends that MatterThere are six mega trends that promise to impact insurance:1. On-Demand, Sharing Economy: The sharing economy is "the new normal." To the broader population, owning key assets, such as homes and cars, is less affordable and less necessary. Services and assets are available and shared on-demand. Personal and commercial behavior and related risks continue to blur, and car-sharing and vehicle subscription models are rising, requiring that we bundle multiple services and insurance. 2. Gen Z and Changing Consumer Expectations: Gen Z is 69 million-strong and has never known a world without the internet. They make user-driven and on-demand choices, and expect their experiences to be omni-channel, mobile, intelligent, and integrated with other applications.3. Automation and Artificial Intelligence: A.I. is no longer Sci-Fi. It's in our phones and our homes, and soon will be offering advice on finances and healthcare--and driving our cars! We are entering the fourth industrial revolution where automated processes and devices free up tens of millions of individuals to focus on more specialized activities and make our lives easier. It will also shift industries significantly, toppling businesses, and launching new ones, as with prior revolutions.4. Connected Everything: It's expected that the Internet of Things will result in more than 26 billion interconnected devices by 2020. This will create new, effortless abilities to connect to social networks, gadgets and experiences. In this world, data and analytics will rule, and integrated services will help mitigate risk and create new value. However, connecting more devices to enhance experiences will pose a growing, multi-billion-dollar threat to cybersecurity. CXO INSIGHTS
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