Disrupt: n. Disturbance or problems which interrupt an event, activity or process. – Oxford Dictionaries

In an age where everything and everyone is being “disrupted,” where even TechCrunch, a technology news site, has its own set of conference-type events in different countries called TechCrunch Disrupt (recently featured on the HBO TV show Silicon Valley), and where all media outlets keep talking about disruption, is the insurance industry responding to being disrupted? Or is the fabled disruption a sleeping giant?

Some of the industry’s most prominent figures have spoken about change, including Henri de Castries, AXA Group chairman and chief executive officer. Here at LifeHealthPro.com, our analysts and editors have reflected and written about the industry’s need to change. But with communications and technology advancing at an unprecedented pace, with a learning curve that can change in the blink of an eye, can the industry really keep up?

The director of MIT’s Technology AgeLab, Joseph Coughlin, Ph.D., recently said that technology has always been disruptive and “now consumers are disruptive, too,” during a presentation at the 2014 LIMRA Marketing Research Conference, according to Todd A. Silverhart, Ph.D., corporate vice president and director, Insurance Research, LIMRA. “Life insurance companies are experiencing this to a degree with policyowner expectations for digital services,” Silverhart added during our brief interview.

Others in the industry agree. We wrote about it on our “24 most creative people in insurance” article back in April of this year.

“I think this industry is on the cusp of a big disruption, and has been on that edge for the past decade or so. The longer it lies dormant, the more disruptive it’s going to be when it happens,” said Transamerica’s chief innovation officer for the life and protective division Aaron Proietti to our editors.

And he paints a picture that might not be pretty for many, but is laden with opportunity for those who know how to seek it, plan for it and put that plan into action: “I think it’s more likely that someone from outside the insurance arena will barge in with a completely different, technically savvy way to protect against risk, and that this will be the major disruption. Our industry is ripe for it, given the immense under-penetration of the middle market, so I’m not sure we have time to evolve,” added Proietti.

time to rethink

Take a look at what Uber is currently doing to the taxi industry. Or look at how Google AdWords has changed online ads. You might call these companies disruptive, and they are: They’ve made a lot of older well-established companies stop in their tracks, scratch their heads in disbelief, rethink their purpose, and adjust … or perish.

While we don’t have a set time frame of “when” it’s going to happen — just like we still can’t predict when an earthquake will occur, though science is getting close — there are a few things we can do.

Silverhart says that it’s about online and mobile. “In the past, once a life insurance policy was purchased and automatic payments set up, a policyowner could go years before having any need for customer service. Today’s consumers — especially Gen X and Gen Y — expect to do anything they want online and mobile,” he says.

In a recent LIMRA survey, 41 percent of Gen X and more than half of Gen Y policyowners said they already have or plan to use mobile devices to obtain service from their insurer, compared with just 15 percent of boomers, Silverhart told us. “Currently, only 29 percent of life insurance companies have mobile service capabilities for policyowners. An additional 44 percent said they plan to have mobile service offerings at some time in the future,” he adds.

And what about the word “disruption” in itself? It is violent; it calls for change; it goes beyond just mere interruption. For some, it might even represent chaos. Can our industry avoid chaos to a certain extent?

“Some disruption can help pave the way for innovation. The reality of the situation we find ourselves in today is that changing consumer expectations are going to demand disruption from all companies they do business with. In the example above, the disruptive nature comes from the fact that consumers wanted more service despite companies’ concern about increasing technology offerings in areas with potentially low usage. Consumers’ expectations of being able to do business how and when they choose are and will continue to move insurance carriers towards ‘omnichannel’ approaches,” Silverhart says.

I can’t help it; after writing this, I feel like that crazy person walking downtown with a sign that says: “The End is Coming.” Most of us walk by such a person and continue with our lives without paying much attention to their sign, yet we may still sense a tiny bit of doom in the back of our heads. What if they’re right? Is there something we can do?

While the answer might be a simple ,”Yes!” it’s not going to be an easy change. And it’s not that we have to be scared or that we have to give up. Hope is never lost. But we do have to face this new reality, look at our industry and start adapting or changing it, now.  

See also:

5 predictions for the future of the life insurance industry

Answers to 8 burning questions that confront the industry

Are best practices just business clichés?