3 Trends That Will Disrupt the Insurance Industry in the Next Decade

It's not totally clear how technology will impact large commercial carriers in the future. One industry expert offers his predictions. 
By: | February 6, 2019 • 4 min read

It’s clear that technology will change the way that insurers do business. In personal lines, the change is already evident from the many on-demand, pay-as-you-go options available from startups who are decidedly technology companies rather than insurance companies (i.e. Metromile, Lemonade, Slice, Jones and Root, to name a few).


It’s less clear how technology will impact large commercial carriers who insure much more complex risks.

We spoke with Assaf Wand, CEO and co-founder of Hippo Insurance, about what trends he expects to play out over the next five to 10 years.

1. Nontraditional players will enter the market in force.

“Technically,” Wand said, “the insurers at the top have been the same companies for the past 150 years.”

That won’t be the case as retailers like Amazon and Walmart become more active in the insurance world. Amazon is reportedly preparing to enter the Indian market as a corporate agent for health, life and general insurance products this year. Some of Amazon’s foreign competitors, including Flipkart and Paytm, have already begun selling life and health products with the support of big non-insurance retailer like Walmart and Alibaba.

Assaf Wand, CEO & co-founder, Hippo Insurance

“It will start with the simplest lines first. Things like travel insurance, shipping, potentially marine on the commercial side. There’s no reason why Amazon couldn’t insure for something like that,” Wand said.

Original equipment manufacturers (OEM) in the auto industry are also venturing into the space. “Almost every OEM has started their own insurance arm now. Ford and GM, for example, are offering insurance for their driverless cars. Tesla’s “InsureMyTesla” program acts as an agency helping to procure discounted rates for customers on policies underwritten by insurance partners including Liberty Mutual, AXA XL and QBE.

Wand predicts that within the next decade, one of the top three insurance providers will be one of these non-traditional entrants. Legacy carriers’ share of the market will be threatened by the new competition.

2. An explosion of data will change the underwriting equation.

“Data sources are going to keep on multiplying on an ongoing basis, and we don’t necessarily know what those sources will be. The amount of data will be insane, and that will force organizations to get the tools they need to bring that data into their flow as soon as possible and analyze it. They’ll become much more data-centric,” Wand said.

Insurers will be able to learn much more about their customers as more data streams are recognized and collected. Correlations among different streams may yield insights that inform the risk assessment and underwriting process. A company can, for example, see whether you’re visiting their website from an iPhone iOS 10 or an Android 8; they can see your location and whether it’s a home or place of business; from there they may make deductions regarding your income level and level of education, which are indicators of risk (or lack thereof).

“Technology always moves faster than regulation. It’s an inherent conflict.” – Assaf Wand, CEO & co-founder, Hippo Insurance

That, of course, raises the question of legality. Certain personal factors are not allowed to influence your risk profile and subsequent policy pricing, and regulation dictating exactly how this wealth of data can be used to fine-tune underwriting will lag behind.

“Technology always moves faster than regulation. It’s an inherent conflict,” Wand said. However, he believes regulations do eventually adapt to meet the needs of an increasingly technology- and data-reliant business model.

“The direction is clear, and regulators are moving faster and faster, but they’ll always lag behind,” he said.

3. Insurers will shift value to more proactive risk management services.

In most insurer-insured relationships, there are few touch points between binding a policy and policy renewal besides a claim, should one occur. And that’s generally the way both parties like it.

“They don’t want to hear from you and you don’t want to hear from them. Insurance is the only product people buy that they hope they never use,” Wand said. But insurers are recognizing that the traditional model may not work forever. Now they want to create more touch points and find ways to add more value to that relationship in the form of risk management services.

This enhances the customer experience and also reduces the likelihood of a claim. Fewer claims should ultimately mean more profits for the insurer and cheaper policies for the consumer. New data sources will play a role here as well.


“Your home insurer for example should use aerial imagery to identify that you have discoloration on your roof, so they can send out a roofer to check it out before something happens. Or they’ll use weather data to ascertain the strength of a storm heading your way and offer to send out consultants who can help strengthen vulnerable spots on your property. That’s what Hippo is doing today and what all insurers will be doing in the future,” Wand said.

More broadly, Wand said insures increasingly will act as caretakers, offering a range of services that can be accessed any time outside of a specific, identified exposure. In a home insurance example, l this could mean regular visit from a plumber or electrician to check your system, or a recommended locksmith to call if you get locked out.

“The shift will be a refocus back on the customer,” Wand said.

Insurtech is already enabling a stronger insurer-insured link with the creation of intuitive and simple self-service platforms for customers, but this is limited mostly to personal lines. In the commercial space, carriers already offer risk management services as part of their product packages, but they often go unused due to lack of awareness. Technology will make it easier for clients to actually access these services. &

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]