Abstract:
New technologies, like InsurTech (FinTech in the insurance industry) is predicted by
scholars to undermine the future effectiveness of the existing insurance business model.
Scholars agree the low rates of digital transformation in the insurance industry and the
wave of technological advancement in the external environment, poses a dilemma for
existing insurers. Existing Insurers have the option to adapt to, collaborate with, or be
eliminated by InsurTech.
This research explores the influence of InsurTech on existing insurance business model.
A qualitative, exploratory approach was undertaken where data was collected through
ten semi-structured, face to face interviews. The interview data was analyzed using a
thematic data analysis.
The study found that the challenges experienced by existing insurers are the drivers
spurring the growth of InsurTech in the industry. That InsurTech has the potential to spur
business model innovation for existing insurers, by innovating the components related to
competitive advantage, customer centricity and operational efficiency. The gaps
identified in existing insurance business models are related to the current target market,
revenue model and customer value propositions. The capabilities that existing insurers
need to build to close those gaps identified include human capital, leadership and
corporate innovation.
This study contributes to the literature by identifying business model innovation as an
influence InsurTech will have on existing insurance business models. A framework is
presented that can be used to understand the influence of external, technologically
driven market pressures on an existing insurance business models with low rates of
technological adoption.
