Disruptive ventures arise from mobile device ubiquity, data-powered AI, and digital platforms that connect buyers and suppliers in new ways. They are reshaping industries such as transportation (e.g., Uber, Lyft, and Didi Chuxing), hospitality (e.g., Airbnb and FlipKey), payment services (e.g., PayPal and TransferWise), and many more.

Conservative by nature, the insurance industry has been slow to embrace new digital business models and take on disrupters. But it won’t be able to dodge the challenge much longer. Consider ZhongAn, the Chinese online insurer created in 2013 by e-commerce giant Alibaba, social network Tencent, and insurer PingAn. ZhongAn has already sold more than 7 billion policies—mostly shipping return and flight delay insurance—to half a billion customers, creating massive waves in the industry with fast, innovative, and customized products sold only online.

 …