Recent developments in the insurance industry embrace various “Insurance Technology” (InsurTech) innovations. To date, there is a lack of structured assessments of InsurTech. Prior research on FinTech fails (1) to clarify how InsurTech can be characterized and what capabilities are employed, and hence, (2) to reveal implications for value creation on firm and industry level. We address this by inductively building a model of InsurTech innovation adopting the grounded theory method. Our empirical data includes 208 InsurTech innovations from a market analysis based on Twitter data and a multiple-case study. The resulting model comprises 52 characteristics and 14 transformational capabilities and is integrated with extant value networks and intermediation literature. The former explains how InsurTech affects firm-level value creation and suggests that disruptive potentials emerge from aligning the transformational capabilities along three interdependent activities. The latter explains the entrance of digital intermediaries and their roles in the personal insurance market.
The following InsurTech Innovation Model proves to be a powerful lens to understand insurance value creation in a digital world in the light of InsurTech. Considering the transformational capabilities individually, reveals sources of competitive advantage that lead to incremental innovations. In turn, disruptive potentials emerge from the combination and the alignment of these transformational capabilities linked to the three primary activities in value networks.