The disruptive environment in which insurers find themselves today brings to mind Steve Jobs’ saying: “Innovation distinguishes between a leader and a follower.” Innovation, of course, can be applied to almost any functional business area, and it doesn’t always directly involve technology. But at present, technology is certainly leading the way.

In fact, much of insurers’ progress to date can be tied to new technologies, such as machine learning, artificial intelligence, geolocation technologies and, of course, digitalization. And much of the effort behind new technologies comes by way of innovative start-ups, fresh companies often from outside the insurance industry. The challenges, opportunities and benefits of working with these market entrants are profound, and even though innovation is considered a top priority, its value via start-ups and market entrants remains relatively untested among the majority of carriers.

One top-of-mind example is in personal and commercial lines auto, where the world of crowdsourcing and video platform as a service (VPaaS) is broadening beyond the typical urban beat cop’s lapel. With intended markets of auto manufacturers, commercial/shared ride firms and — incidentally — insurers, Nexar uses vehicle to vehicle (V2V) technology and artificial intelligence over a smartphone camera to continuously record video of the road in front of the driver, as well as audio within the vehicle itself. In addition, it’s one of the first companies to tap Waze’s transport SDK, enhancing the product with the Google-owned company’s crowdsourced navigation data.

Maybe most significant, the technology leverages the iPhone’s sensors to analyze and understand the car’s surroundings, and its analysis enables the creation of accident reports that include a video of the accident to the claim, along with a detailed reconstruction based on the iPhone’s sensor readings.

Whether Nexar or its competitors expand into the mainstream personal lines’ area depends on if the company can collect and transmit the type of driver behavior data already in use via dongles and other onboard systems, and of course, if they can prove that the product reduces frequency/severity of loss. And much will depend on whether insurers are willing to partner with this category of innovators, which remains a question. Of the insurers that participated in PwC’s 20th Annual CEO Survey:

  • 67% of industry leaders see creativity and innovation as very important to their organization;
  • 61% are interested in exploring the benefits of humans and machines working together;
  • 49% are considering the impact of artificial intelligence on future skills needs.

Yet interestingly, reports PwC, only 37 percent of insurers plan to collaborate with entrepreneurs or start-ups in the coming year.

Meanwhile, at least one leading New York insurer is offering discounts to drivers that employ V2V technologies, although Nexar won’t confirm their identity. And another start-up, Slice, announced this week that it completed an on-demand, pay-per-use rideshare app, releasing it to a select set of rideshare drivers to gather data and test the Slice technology. Slice’s latest product is designed to protect the rideshare drivers while covering the liability associated with the commercial activity of ridesharing, notes the company. The Slice policy is issued from the time the driver goes online and starts work to the time they go offline at the end of their shift - from app on to app off.

With the report by the National Highway Traffic Safety Administration on the number of fatalities from car crashes (up more than 7 percent in the United States this last year), it’s hoped that insurers will take more of a leadership role and evaluate the importance of partnering with V2V and on-demand innovation providers to incentivize drivers with discounts to employ the technology.