Change is inevitable, even for insurers. Leaders in the global market across all industries are not bracing for but rather embracing change. Positive transformation is modeled around true business agility and innovation coupled with profitable growth–and it's happening. Within the next two years, transformational business models will begin to realize their potential–expanding product offerings, reinventing service levels, and driving efficiencies to the fullest. The insurance industry, on the other hand, has become accustomed to bypassing any type of transformation.

As the global marketplace continues to evolve around the insurance industry, insurers will need to embark upon the true journey of transformation. External trends such as shifts in demographics and changing customer expectations are driving the need for underlying business processes and supporting technology to transform across the insurance industry. Attracting and retaining Generation X and Y as customers and employees are two of the biggest hurdles for insurers. These generations are not loyal to anyone or any company; they are technically savvy and have unprecedented expectations and demands.

The shift in demographics is having an immediate impact on the distribution channels. The number of independent agencies is decreasing due to a flurry of consolidations from mergers, acquisitions, and retiring agents. This transition immediately puts the squeeze on the carrier's ability to be one of the top carriers from an agent perspective. Independent agent-produced quotes are decreasing across the industry while sales through the Internet and call centers are increasing. In 1998, Internet and call center sales for private passenger auto accounted for less than one percent; today, it is more than 12 percent.