Niche Insurance in a Homogenous Landscape

Insurance is a necessity. But it isnt always a grudge purchase for a consumer...

The biggest insurers in the world get to the size they are because they’re homogenous; catered to the needs of as many different people across the market as possible. They do it incredibly well and are big, successful businesses that contribute to the fabric of society by protecting valuable assets, but also by providing employment opportunities and general economic contribution.

But are they keeping up with society’s needs? More than ever, humanity is looking for ways to be individual, special, unique. It's hard not to support this notion, because we are all indeed individuals with different lives, passions and values.

This increasing desire to be unique drives consumerism. It always has – that’s what underpins competition and variety in the marketplace. From clothing to food and everything in between.

This concept applies to choosing an insurance provider too. The Australian market for example, has a group of very large, mainstay insurers that are challenged by smaller underwriting agencies.

With distribution through intermediated channels or direct, choice has been available for some segments who appreciate a more bespoke or tailored approach for some time.

Is it enough though? There is significant change afoot in consumer behaviour and it favours those who can provide truly authentic experiences that speak to the individual.

The affinity that tailored brands garner is what makes them special and valuable in their own right. They will often personify with their market and provide a product and importantly, a service, that results in portfolios that enjoy both strike and retention rates that would be unheard of in the generalist insurance market. All whilst taking market share from the incumbents.

Agency businesses allow for entrepreneurialism and focus of the type that simply cannot be facilitated by market incumbents.

The question that needs to be asked is whether the bigger players can shift fast enough to accommodate for a changing market, or will they leave themselves open for disruptive attack.

Or maybe, just maybe, they will make a strategic shift to apportion some investment into the agency market.

Time will tell...