Innovators take note of Spencer Lazar’s great article about the opportunities for disruption in the risk business. I just came across his article and really enjoyed the numbers and perspective.

When you think of big market opportunities insurance is certainly one of them representing more than $1.3T in premiums in the U.S. alone. $1.3T in premiums is bigger than the the amount of money spent annually on online travel (~$160B) + household work (~$460B) + food delivery (~$600B) — combined.

The industry player are really big – and really old. There are 46 insurance companies in the Fortune 500, with an average corporate age of around 95 years. If were talking life insurance and actuarial science – we would say you have a high probability of near term mortality.  These companies were designed pre-internet, and it shows. As Spencer points out:

The industry’s entire organizational structure was designed for an antiquated, Mad Men era buying experience. And, these incumbents are pervasive. Collectively, insurance companies employ more than 2m people and spend billions of dollars annually on marketing. You can’t watch an hour of television without getting interrupted by a little lizard, caveman in tennis whites, or quacking duck. It’s everywhere.

Disrupting these entrenched behemoths is going to be expensive and difficult.  They have built walls around their kingdom via the establishment of complex regulatory regimes that are designed to not only protect consumers, but also protect the kingdom.

Entrepreneurs will need to be persistent, creative and innovative as they build business models that better address modern-day needs of  consumers.