Much has been written about innovation in the insurance industry as well as Google’s Compare, USAA’s recent participation in Compare, Liberty Mutual’s venture with Nest, big data, etc.

Executive Summary

Companies whose core businesses had to do with taking pictures, booking travel, selling books and music—along with a host of others—have been upended by technology companies that found new ways of doing those same activities. Erin Hamrick of Sterling James provides a comprehensive "gone list" and suggests that the handwriting is on the wall for insurers that don't reshape their businesses with a focus on technology at the core.

What is really happening here?

It’s simple. The elephant in the room is the rapid pace of technology as the core disrupter that will change the industry forever.

The insurance industry looks to the past in order to predict the cost of insuring the future. The irony is that if we assess the constructive disruption that has happened in the past in virtually every industry except ours, then shouldn’t we be better prepared for technology to gobble us up? Let me explain.

Remember Pac-Man as he went through all those mazes eating up everything in his path? Keep that mental picture and think about Marc Andreessen’s Wall Street Journal essay written four years ago, “Why Software Is Eating The World” (WSJ, Aug. 20, 2011).In it, he explained how the world was changing because every industry is being defined by sophisticated software. (See accompanying textbox for more on Andreessen and his essay.)

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