InsureTech moving to Evolution rather than Disruption:

Insurance is one of the world’s oldest industries. The main concept of insurance which is “the spreading of risk” has been around almost as long as human existence. The first written insurance policy appeared in ancient times on a Babylonian obelisk monument with the code of King Hammurabi carved into it. The “Hammurabi Code” was one of the first forms of written laws. These ancient laws were extreme in most respects, but it offered basic insurance in that a debtor didn’t have to pay back his loans if some personal catastrophe made it impossible (disability, death, flooding, etc.) – from The History of Insurance at

Over the years that followed, insurance evolved to the current marketplace. For the most part, insurance products and companies have functioned in the same way for the last century. And now, the times are changing. The question is how fast can an industry as old, as large and as regulated as the insurance industry is, be able to change? As we’ve seen over the last few years, many InsureTech firms have tried, however, few have really succeeded. A big reason is because Insurance is not a Commodity!

The insurance industry is starting to evolve rather being disrupted. For a great look at this, check out Too Big to Fail Fast by Shefi Ben-Hutta who does an excellent job of covering everything insure-tech. Shefi takes a look at how the concept of “fair” is a major component of how InsureTech firms plans to change the industry, however we all have a different definition of fair and life is more complicated than this and life is not fair. The Insurance Bill of Rights was created to provide a best practices standard for the insurance industry to act in the best interests of their clients and to create a win-win situation which is always the best negotiating result.

A growing number of traditional insurance companies are starting or investing in InsureTech start-ups so we are seeing a merging of traditional and high tech, and if you are interested in trying to keep up, Shefi does an excellent job of tracking InsureTech through her Coverager website and newsletter.

Innovation is an area where technology will make a difference. Micro-insurance powered by blockchain technology could be applied to purchases, rentals and services contracts through a variety of methods. This technology could help with some of the insurance gap issues in the sharing economy. See: LenderBot by Deloitte and Stratumn to bring insurance to the sharing economy using bitcoin’s blockchain. Insurance needs are different than they have been in the past, even within the last 5 years.

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