Self Disruption. . . using Drones

How one UK Insurance firm is challenging the status quo

Right now, insurance is experiencing serious disruption. Autonomous cars, connected homes and countless personal devices are making it even more important to protect possessions, whilst the rise of FinTech and InsurTech startups are challenging existing businesses and forcing them to reinvent their strategies.

UK insurance company Direct Line is doing just this with the help of cutting edge technology. Instead of passively responding to insurance claims, the company is aiming to prevent the claims from even happening. Their first project involves reducing accidents that happen at night with a prototype fleet of responsive drones fitted with powerful, on-board lights. Imagine you’re cycling home on a dark winding road – you could call a drone to light the way, acting as your own personal, portable street light. For obvious reasons, reducing the number of insurance claims seems like a negative thing for insurance companies. If technology can prevent accidents from happening, then insurance companies will suffer. Fewer accidents means fewer claims, so why on earth has Direct Line embarked on a policy of self-disruption?

Why do companies self-disrupt?
Disruption is a near inevitability, especially when there are so many innovators and so much technology to encourage it. The majority of established businesses are thoroughly surprised when disruption comes knocking at the door, but firms like Direct Line are ready for it because they caused it. The most perceptive companies are aware of change, and instead of waiting for somebody else to come along and threaten their businesses, they’ve decided to do it themselves. This might look like an risky move to make, but by recognising the potential for disruption and then actively causing it, companies can attempt to future-proof themselves. The most successful businesses know how to predict and respond to disruption, and if they themselves are the disruptors, then the effects are far easier to deal with. It’s jumping before you’re pushed.

Self-disruption as a business strategy
It’s not just InsurTech which is learning how to make the most of disruption. Intuit is a software company was founded over 30 years ago – but it’s remained relevant due to a willingness to change. The company scrapped its legacy desktop-based system for the Cloud, unlike other legacy competitors who have since fallen by the wayside. Many companies stick to what they think they know, caught in the classic Innovators Dilemma. Without focusing on new innovations in all likelihood they’ll end up the next Blockbuster or Kodak.

It’s true that successful self-disruption is no easy feat – so how do you do it?

First, it takes confidence. It also takes commitment – you can’t disrupt yourself once and be done with it, because disruption is a continual process. Perhaps the most important part of self-disruption is having the ability to see your own business as a disruptor would – in other words, to be self-critical. Many companies simply can’t, or aren’t willing, to do this.

It’s been proven time and time again that the most successful businesses know how to navigate disruption – but the best of them know how to facilitate it, too. Direct Line, for instance, has fundamentally changed the way that customers look at insurance, which will have a knock-on effect on the industry as a whole. It will force other businesses to adapt quickly, and presumably with less success than Direct Line itself. Whilst it might look like self-sabotage, it’s actually a very effective way of getting ahead of competitors. It’s easier said than done, though, which has been demonstrated by the stubborn legacy companies that are no longer in business. Companies that react to disruption have a better chance of success. You can never say for certain whether self-disruption will pay off, but if Amazon is anything to go by, it’s definitely something worth thinking about.

How could your business achieve self-disruption? Which other companies have successfully disrupted their own business models? If established companies can disrupt themselves, how will this effect innovative startups? Share your experiences and opinions.