Visualize: Insights that power innovation

Three keys to success for insurers in the age of disruption

By Neil Spector November 9, 2017

Insurtech and disruption - insights from Verisk's 2017 Risk & Analytics Summit

The new norm: change and disruption

Our economy is in the midst of major disruption. Technology is changing almost everything we do. E-commerce is booming. And customer expectations are changing every day. A new generation, known as millennials, is expecting on-demand coverages and a faster customer experience from quote, to bind, to claim—all from the ease and comfort of smartphones.

InsurTech smashing barriers

InsurTech start-ups are beginning to find their way through big and valuable data. And the large amount of investor-backed funding they’re receiving is breaking down some traditional barriers to entry in the industry.

New trends, such as the sharing economy, connected cars, and the Internet of Things, are changing the face of risk. 

The premium leakage problem

But perhaps above all else is the reality that, in today’s rapidly changing world, the process of evaluating risk never ends. According to our estimates, personal auto insurers face about $30 billion in premium leakage every year.

Auto isn’t the only market where premium leakage is an issue. Across all lines of business, insurers are constantly struggling to make sure that their rating accurately match the risks they’re underwriting. Too low and they risk profitability. Too high and they risk growth.

So how can insurers equip themselves for the disruptive challenges they face—both now and in the future? By focusing on three key tasks:

  1. Search and prepare for new market opportunities. Autonomous vehicles, cyber, and flood are just a few of the areas poised for potential growth. But to succeed, you’ll need to understand how these risks will affect insurance and have the tools necessary to address the requirements of each market. 
  2. Adapt your business to meet changing customer expectations. As noted, millennials and a growing number of customers have begun to expect on-demand service from quote, to bind, to claim from their smartphones. How can insurers meet these changing expectations? By using tools that automate the insurance process, such as technology that prefills applications with critical customer data.
  3. Invest in data and analytics to maintain profitable growth. Even if insurers have entered new markets and adapted to meet customer needs, they’re still not finished. They should look to keep policy pricing on each account accurate throughout the policy life cycle. How do they ensure that pricing is commensurate with risk? It’s no secret: robust data and analytics can help tell insurers how their risks should evolve over time.

At ISO, we’re working hard to help insurers with each of these tasks. We’d love to share with you some of the solutions we’ve developed to succeed in the age of disruption, and we welcome your feedback as we work to create new products to meet your needs.


This is the first in a series of articles presenting some of the insights shared during the 2017 Verisk Risk & Analytics Summit.


Neil Spector is President of ISO, a Verisk business. You can contact him at nspector@verisk.com.