The concept of “disruption” can feel a bit cliché. It seems like every week we’re hearing about some new business that promises to be the “Uber” of insurance. While it’s easy to be dismissive, you can’t really deny that industries are still being disrupted. Think about what Robinhood has done to self-directed investing or what Square has done to traditional payment processors. If you do find yourself in an industry that is being disrupted, it’s important to be aware of a well-established pattern I’ve seen incumbents fall into when their dominant position is challenged. It usually unfolds in three stages.
An Incumbent’s Reaction to Disruption:
- Denial: Pfft. Who do they think they are? They can’t possibly compete with everything we’ve built.
- Insecurity: Wait—we can also be sexy and innovative and tech-forward, right? Right!? Did you download our app?
- Acceptance: This is fine—even good. If we’re clear about our value proposition and not afraid to differentiate, there’s room for everyone.
A New Business Model in the Insurance Industry
This pattern doesn’t just apply to the young, scrappy startup taking on the big, established behemoth. For example, look at what’s happening in the insurance industry. In this case, it’s not tech entrepreneurs doing the disruption; it’s an entirely new business model.
Recently, private equity firms and alternative asset managers have been buying or merging with established insurance companies. The Apollo/Athene merger is the example that comes to mind, but Brookfield, KKR, Blackstone, and Carlyle have also done similar transactions. It makes sense for them. They gain access to more stable, long-duration capital; they can deploy more assets and create captive buyers for their strategies; and they can potentially boost their credibility in the eyes of regulators and ratings agencies. The insurance companies, on the other hand, gain scale, exposure, higher yields, and a jolt of market relevance—they’re no longer just a stodgy insurance company.
We recently worked on one of these mergers, and as we spoke to consumers, financial advisors and industry leaders, we could see the incumbents falling into the familiar response to disruption. Let’s take a look.
Stage 1: Denial
These new players are hardly startups, but the model they’re introducing has caused real challenges to the traditional way insurance companies merchandise their businesses. They’re simultaneously selling safety and sophistication—to different audiences, with different risk tolerances, all under strict regulatory scrutiny. Over-index on innovation or yield, and you risk spooking regulators and policyholders. Over-index on safety, and you dull differentiation for your investors.
Internally, the challenge is just as real. These mergers bring together companies with very different cultures, incentives, and value systems. Alternative asset managers worry about an insurance company diluting its elite sheen, while insurance companies fear any threat to their reputation for stability and predictability. It’s all a very delicate needle to thread—which initially caused some incumbents to question whether it can ever really work.
Stage 2: Insecurity
Well, the dust of these mergers is settling, and like it or not, this trend is not slowing down. And sure enough, we’ve seen some companies undergo what you might call an identity crisis.
To compete in this new landscape, some traditional insurers have let their messaging drift. They’re leading with their investment capabilities and adopting capital-markets vocabulary. Consciously or not, they end up downplaying their guarantees and underwriting discipline while understating their history. It’s a recipe for undifferentiated messaging that inadvertently gives more power to their new competitors.
This is the most dangerous stage. If you concede that yield, sophistication, and structural advantage are as important as your new competitors claim, traditional insurers will almost always fall short. By chasing the comparison, they undercut the value they’ve historically delivered best, and that best differentiates them.
Stage 3: Acceptance
The sooner you can get through the second stage (or skip it entirely), the better. Because the way forward isn’t imitation. It’s clarity.
Traditional insurers should embrace the fact they are built for a different job: stability, certainty, and the keeping of promises. They don’t reject innovation. They reject fragility. They exist to be there in moments of uncertainty—when complexity breaks and confidence matters most.
And honestly, what’s sexier than that? Strength. Certainty. Reliability. Someone who shows up, keeps their word, and doesn’t disappear when things get hard?
If that doesn’t feel attractive enough yet, give us a call. We can help with that.
What’s New Isn’t Always Better
When something is new or different, it feels exciting and innovative—and we want to be a part of it. And to be sure, this is not an argument against disruption. These new unions have a value proposition that no doubt fills a legitimate need in the market. But here's the harder, more interesting creative challenge: how do you make enduring feel exciting? How do you make reliable feel like a competitive weapon instead of a consolation prize?
That's the brief traditional insurers should be handing their marketing partners right now. Not "how do we sound more like them?" but "how do we remind the market why they need us in the first place?" The brands that win in disrupted categories are rarely the ones who out-innovate the innovators. They're the ones who out-clarify them—who know exactly who they are, who they serve, and why that still matters.