Innovation and disruption are in reality two sides of the same coin (or Bitcoin, if you will). On one side, innovation may describe the driver of change, the creative thinking and ideas that lead to new technology, new methodologies and new approaches. On the other side, the by-product or necessary consequence of innovation is change to the status quo, the uprooting of traditional models and incumbents and the disruption of markets. And so in one sense, the much hyped concept of “disruptive innovation” might be seen as no more than a descriptor of human advancement. But there is a reason the expression has become the catchphrase of this generation of tech-savvy organisations; and that is because organisations are seeing disruption not merely as the consequence, but as itself a driver of innovation. Where markets can be disrupted, there is opportunity; and so organisations these days are quite proudly identifying themselves as disruptors as much as they are innovators.

The insurance industry is not shielded from disruption, and in fact has been subject to significant disruption in a number of forms already. In this age of the digital economy, it may be that the insurance industry is on the brink of even more seismic change. This article identifies current disruptive innovations affecting the global arena and discusses some potential areas where disruptive innovations have the potential to reshape the industry.

The key to digital disruption

The term “disruptive innovation” has only gained popularity since it was used by a Harvard Business School Professor, Clayton Christensen in his book called “The Innovator’s Dilemma”. Disruptive innovation is described as innovation that creates new markets by appealing to new categories of consumers. One aspect of disruptive innovation is the implementation of new technologies, but alternatively, it may involve the development of new business models and exploiting old technologies in new ways.

A major difference between innovation historically and disruptive innovation, as the expression is used today, is the digital aspect of the current surge of innovations. Innovators have capitalised on the availability of mass marketing through the “Internet of Things” and global connectivity and the collection and use of massive amounts of data and information stored on the internet. The expre