Consumer Insurance is Ripe for Disruption: What Investors Need to Know

businessman on computer looking up consumer insurance

New technology will make mega-consolidation inevitable, and savvy investors can take advantage by noting these key trends now in consumer insurance.

As we’ve witnessed from recent disruptions in the education and healthcare industries, consumers are demanding better services and experiences for their hard earned money. 

The consumer insurance industry: home, auto, and life insurance–is poised for major disruption as insurance buyers want an affordable, easy, and fast technology-driven selection process. Here are the key takeaways for consumers and investors in this space. 

Offline Insurance Agencies May Get Left Behind

Steep competition among insurance carriers has created an abundance of plans and options when it comes to personal insurance. 

Most boutique or even mid-sized offline insurance agencies currently don’t offer online comparison shopping and bundled plans, so they simply can’t offer the same breadth of options and comparable technology-driven customer experience as digital insurance agencies.

Advertising, branding, online reviews and great customer service give the top firms a significant advantage. Consumer insurance shoppers don’t want to only compare two or three firms against fixed pricing, they want all the top firms competing for their business so they can be assured they’re absolutely getting the best deal. Top-rated insurance carriers will have their financial integrity graded “Excellent” or better from A.M. Best, or an A, “Exceptional” rating from Demotech

Customers don’t want to know their insurance agents by name if it means they need to navigate a mountain of paperwork and fill out a ton of paper forms just to make changes to their plans or providers. Digital insurance agencies who have the ability to allow people to switch plans before they expire, in order to get their customers a better deal, will quickly rise to the top.

No One Wants to Speak to Insurance Salespeople Anymore

Every insured individual needs access to a licensed agent every now and then to ask personal questions about their plan and get informed answers. What no one needs are insurance salespeople calling them or emailing them night and day with upsells and offers to switch. There are many online sites offering competitive quotes, called lead generators, but their real reason for existing is to sell user information to insurance salespeople. When shopping for quotes, consumers should look for digital insurance agencies that don’t sell info or engage sales when comparing quotes on consumer insurance.

Databases can already auto-fill most of the information a provider needs after a person answers a few simple questions from an online form. The insurance industry has done a good job of educating consumers on their products, today’s buyers don’t require a lot of hand holding to make a decision based on instant quotes. What’s needed is an end-to-end experience in one touchpoint.

Consumer insurance salespeople make their money off commissions from premiums, so the temptation to over insure a buyer is high. With auto insurance alone already accounting for 57% of the average household income (Bankrate 2022), being overinsured can be a major burden.

Online digital agencies that leverage technology to recommend coverage levels take human error out of the coverage equation.

The Customer Experience Gap is Widening Between Offline and Digital Insurance Agencies

Legacy insurance agencies that conduct their business offline still make up the bulk of the industry. However, digital insurance agencies that leverage technologies like Data Lakes, and Robotic Process Automation (RPA) enable consumers to compare instantaneous competitive quotes from a number of different companies and complete transactions on a smartphone, tablet or computer in minutes will soon be the method of choice for insurance seekers.

Digital insurance agencies make the consumer feel empowered by offering them a seamless, hassle free, safe insurance shopping and purchasing experience from anywhere using a smartphone, tablet, or computer. 

Consumer insurance, including home, auto, and bundled options, are not “set it and forget it.” If a homeowner finds out that their agency has decided not to renew their homeowner’s policy for the following year, they need the ability to review and manage their policy immediately, from anywhere simply by logging into one account. That is not possible from an offline company. 

All of a person’s policy and transaction information should be accessible from one secure digital location. That way, customers can request modifications or cancel policies easier, by updating their information online and following a few simple prompts. The ability to switch and save on coverage should be in the customer’s control at all times–not left to the whim of the insurance agency. 

Getting the right consumer insurance for the right price should be attainable for anyone. With nearly 6,000 insurance companies in the US, the companies who offer the most speed and transparency without sacrificing security will be the ones that succeed.


* indicates required
Previous articleZack Butcher
Next articleTim Mueller
Adrian Dzielnicki is a licensed insurance agent and CFA charter holder (Chartered Financial Analyst). He is also the co-founder and CEO at Before that, he co-founded Graviton Capital, one of the largest microcap investment banks in Poland. In less than 10 years, he took over 60 companies public on the Warsaw Stock Exchange, raising over 200 million USD. He received his Masters in Economics from Wroclaw University.