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Insurance Wake-Up Call: Embrace the Shared Economy Opportunities

February 11, 2015

Denise Garth : insurancenetworking – excerpt

Disruptive influencers and levers of change are surrounding the insurance industry at an increasing speed and intensity that is challenging industry practices, assumptions, and business models. One of those outside-the-industry and economic influencers is the shared economy, recently highlighted in the SMA research brief, Crowdsourcing and Open Innovation: Powering the Sharing Economy. According to a Forbes article in January 2013, it was estimated that for 2013 the revenue flowing through the shared economy directly into peoples’ wallets would surpass $3.5 billion, with growth exceeding 25%. At this rate, peer-to-peer sharing was moving from an income boost to becoming a disruptive economic force.

Just look at a recent profile by Silicon Valley Business Journal, where Uber Technologies CEO Travis Kalanick confirmed that Uber raised another $1.2 billion following a record year of growth in which it expanded the number of cities it serves by more than 400 percent to 250 cities in 50 countries. Astonishingly, Uber, founded just four years ago, previously raised $1.5 billion, including $1.2 billion in June, when the “post-money” valuation was $18.2 billion, compared to today’s post-money valuation of about $41.2 billion. Now that is a disruptive economic force!.. (more)

Taxis and hotels may look forward to a level playing field with their “smart” rivals sooner than they thought. Once the insurance industry and local tax boards push up their overhead, the smart-ups will lose their low-overhead advantage. If consumers still remember what it was like to demand service, they may get it again. First time many of us have been saved by the insurance policies, but we will take it without complaint this time.

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