Kobi Bendelak
Artificial intelligence and advanced computing are reshaping competition in insurance markets, often altering long-established dynamics. Unlike previous technologies, AI acts as a dual competitive force, simultaneously reinforcing concentration while lowering barriers to entry.
On one side, incumbent insurers benefit from economies of scale: extensive data repositories, capital resources, and the ability to invest heavily in advanced models while complying with complex regulatory requirements. These advantages may reinforce market concentration and strengthen incumbents’ market power, particularly in highly regulated environments with strict solvency requirements.
On the other side, the increasing availability of affordable AI tools enables new, agile, and often global entrants to compete through lean, niche-focused models. These players typically avoid broad product portfolios or operational complexity, relying instead on speed, specialization, and technological innovation to challenge established insurers.
Legal and regulatory frameworks are decisive in determining which force prevails. Rules governing data access, transparency, compliance, and financial stability shape competitive dynamics and may either foster innovation or unintentionally entrench incumbents.
The key challenge is designing regulation that supports competition and innovation without compromising stability or consumer protection.
About the author: Kobi Bendelak, CEO of InsurTech Israel, leading the Israeli InsurTech ecosystem and operating the Israeli InsurTech Accelerator Program since 2021.
These articles are based on ongoing conceptual and research work exploring the economic, legal, regulatory, and ethical implications of artificial intelligence and advanced computing capabilities on the insurance industry.
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