The insurance industry is at a crossroads as fintechs gain traction through customer-centric products, a Deloitte report says.

“It’s a moment of truth for insurance,” Deloitte says. “It’s time for something new. When traditional business and operating models stop delivering sought-after results, the logical next step is to, of course, explore alternatives with greater voracity and risk appetite. 

“In other words, the industry should disrupt itself before a newcomer does it for them.”

Three outcomes are possible, depending on how general insurers respond and technology evolves, Deloitte says.

In the “changing-the-channel” scenario, incumbent insurers could simplify buying processes and provide more tailor-made solutions. Customers can select options that best suit their lifestyles.

Another possibility involves underwriting using sophisticated algorithms and artificial intelligence, as third-party underwriting becomes the industry standard.

Alternatively, insurers may offer time-flexible, event-driven coverage that can be turned on or off at will.