If you look at the history of technology, a huge new trend has completely transformed a business sector every 10-15 years. However, usually the introduction of a new digital development is underestimated, and the impact of new technology is underrated and met with defiance by industry incumbents that do not want to change or challenge the status quo.
Executive SummaryInsurTech should be a game-changer, but there have yet to be any initiatives that are truly disruptive, according to Hatem Jabsheh, chief operating officer at International General Insurance (IGI), a specialist commercial insurer and reinsurer that underwrites a diverse portfolio of specialty lines. There is no doubt at all that InsurTech will eventually and fundamentally change the culture of reinsurance. It has to—technology is challenging traditional reinsurance models in every global market, and for the reinsurance sector to stay relevant, it must adapt.
The truth is, technology has been disrupting and revolutionizing specific business sectors for decades. Look at how AirBnB has disrupted the hotel industry and how Uber has changed the way people use taxis.
In an industry like reinsurance, which has been writing business for centuries, resistance to change is particularly high among those who are worried that their traditional industry will be rendered obsolete by the digital revolution. However, the incumbents need to realize that the reinsurance business model is evolving, and the traditional way of placing risk is changing—particularly with the growing acceptance of alternative capital. InsurTech is one of a handful of forces that are reshaping how business will be transacted in the future, and incumbents must acknowledge that they need to change if they want to remain relevant and in business.