In last summer’s blog series, I looked at the impact of Digital on the insurance industry’s barriers to entry. Now I’ll change the perspective and ask, in response to Digital and other pressures, “What will the Insurer of the Future look like?”

Auto/Motor Insurance

The Insurer of the Future will do very little business in the auto/motor market. Insurers that remain focused on this segment (whether personal or commercial lines) will either shrink dramatically or fail.

As I said last year, once fully driverless cars become the norm, then:

1)      Accident rates will be diminished dramatically; and

2)      There will no longer be drivers to insure.

But it’s actually even worse than that:

3)      Thefts will be minimized too, as vehicles can be disabled remotely;

4)      Fire and malicious damage cover will no longer be needed, as personal and business vehicle ownership is increasingly replaced by manufacturers supplying ‘vehicles as a service’;

5)      With the majority of vehicles still being owned by manufacturers, those manufacturers will increasingly self-insure – at best taking some reinsurance cover from the industry for catastrophic software failures.

All of the above won’t happened overnight – but the trends are already there.

Please see Part 2 – Underwriting and Pricing for further predictions.