From the “seventh wonder” of the business world and largest retailer in the US, to bankruptcy and cautionary tale — the shadow of Sears looms large for any incumbency.

But is every established industry obliged to have their own Sears? No.

Are some industries more at risk than others? Absolutely.

Is insurance one of them? I promise I would not have started writing this if I was going to argue anything else.

The question is, when it starts to happen “suddenly,” who is going to be ready? And who is going to be Sears?

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Most insurance incumbents are heading into the future with barely a toehold on the next generation of platforms. Most incumbents, and even most insurtechs, are trying to meet customers where they think they are today, while being leagues away from where they will be in the future.

And we've seen this movie before. 

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Sears had the platform for a while — their hammer lock on catalogue sales across the US. And they were even nimble as things changed, for a bit.

As the rise of the automobile pushed retail into the suburbs, Sears dominated the growing “department store” concept. Unfortunately, they were so focused on the next innovation (financial services) that they missed the next platform: The internet.

So let’s come back to insurers. Most of them were quick, or quick enough, to move from brick and mortar to internet 1.0 distribution. And while agents have always been a critical piece, they now have to compete with neobanks gobbling up market share among younger users, consumer tech giants becoming fintechs, and the escalating war for the great US “super app.”

In other words, it may be time for the legacy carriers to worry about that Sears-sized shadow looming over them.

Yes, insurance companies have apps. But the functionality is often utilitarian and hardly a "platform experience" that anyone wants to spend time on.

Sure, regulation and capital requirements provide a buffer that Sears may not have enjoyed, but the embedded insurers are chewing through that faster each month.

And while carriers may benefit in risk placement relationships today, there are a handful of behemoth reinsurers looming in the deep who could upend these dynamics if they feel the tides of distribution shifting.

So sit back and imagine you’re a leader at a legacy carrier. Things are good! 2020 was a record year. You head home and ask your kids if they saw your post on Facebook — they laugh and open TikTok. You check the weekly report from Marketing. CACs are soaring on Instagram ever since the recent iOS update and volume is way down.

You start to wonder about the power of “owning” the next generation of platforms that people actually want to use.

A month later you notice another neobank is distributing their own insurance. Is that the same one as last week or a different one? It’s hard to keep them all straight!

A year later it starts showing up in the numbers. GWP is…flat? Is it down among 18-24 year olds!? That’s not good! What do we do? Add a new product? Buy a Super Bowl ad? Hire Dua Lipa?!

This goes on and on and the next thing you know, you’re selling your headquarters.

I’m accelerating the timeline here a bit, but things are shifting in insurance, once again. And like all sorts of changes, they will happen “gradually, then suddenly.” Distribution via new platforms like neobanks and consumer tech brands will take time (I’m on the record as taking the longer side of that bet), but it will happen.

The question is, when it starts to happen “suddenly,” who is going to be ready? And who is going to be Sears?

(A postscript: I had been noodling on this piece for a while, but Meta/Facebook’s recent troubles are what kind of jolted me to finish it.

It’s early days, but things are looking grim for Meta, for basically the same reasons I’ve covered here. Facebook pretty much created the modern concept of social media, and monetized and owned that platform very successfully.

Zuckerberg snapped up great properties like Instagram and Whatsapp and surfed through various surges of platform and preference change with steady growth. Now though, Facebook’s lack of a viable consumer hardware platform has gone from problem to Problem. They tried to solve it with Oculus and, so far, that has flopped. The iPhone is where people really are and so, when Apple decides to change something, they can create the largest stock price drop in history.)