Online and mobile technology provide insurers with a rich source of data about their customers. Innovations in Big Data allow insurers to boost sales and marketing strategies. For example, price comparison websites and social media play a growing role in the pre-sales process, especially in the auto and homeowners' sectors in developed markets.

"The experience of UK personal motor insurance markets, where e-commerce sales now dominate, shows how quickly consumer buying patterns can change," the sigma's authors say. "A 2014 survey indicated that by 2018, insurers anticipate nearly one fifth of their business will come from online sales through personal computers."

Mobile-specific features increase interactivity and ease-of-use to better engage customers. But insuers emphasize simplicity in design, recognizing that customers are unlikely to review a lengthy policy on their smartphones, but will use their smartphones to update  policy, submit damage photos or submit a claim.

Telematics and the shift toward usage-based insurance allows insurers to provide personalized coverages and more accurate risk-based pricing that differentiates themselves from their competition. Since Progressive first offered UBI in the early 1990s, more than 1.4 million drivers in the U.S. have tried its program, of whom two-thirds have earned a premium discount of 10% to 15%.

The sigma's authors conclude that new technology will eventually enable customers to arrange almost all of their insurance needs through remote digital channels. But this doesn't spell the end of intermediaries. Customers will continue to value personal interaction and expert advice, especially for complex commercial and life and health risks.  Agents and brokers will be challenges to adapt business models to meet customers' evolving needs and preferences, while keeping integration and multiple distribution channels under control.