Related: Insurers slow to adopt insurtech could be courting risk

Within five years, these channels, alongside digital platforms, may become the primary source of new sales (greater than 80 percent for both life and personal).

"These findings imply that retail lines insurers should be investing in distribution agreements and digital engagement technologies today if they are expecting to play a significant role in the future," he writes. "It also raises some tough questions for insurers selling mass market products through traditional agent and broker channels. However, these results should not be interpreted universally across the segment, because some more complex products and/or niche market segments may not be easily adapted to these price-sensitive and digitally distributed channels."

Although commercial follows a similar pattern to the retail lines of business, the time-to-value is stretched out over a longer timeframe, Macgregor writes. For some of the respondents (17 percent), digital platforms are likely to never feature as a method in future distribution. In personal lines, the greatest impact in the medium term appears to come from a combination of active loss avoidance and utility/behavior-based pricing. Although there are insurers working on aspects of this, including mobile-enabled Trov-like, auto telematics and the connected home products, it is not yet a widespread focus with the majority of products still being sold as commodities with minimal tailoring.

"Data, AI, mobile, and connected devices still present a huge opportunity for insurers," Macgregor writes. "As the ease of access becomes simpler and cost to develop these technologies continues to plummet, it is likely that we will continue to see a flurry of activity while insurers seek the winning product design."

In health and to a lesser extent life lines, the same two characteristics also feature strongly, albeit at a longer time-to-value rate than personal lines. Propositions such as Vitality have already seen a flurry of new technology B2B players rush to meet this demand, such as Dacadoo, Sureify, and Life.io.

"Healthtech and biotech are also vibrant sectors in their own right," he writes. "Although the science behind some of these concepts still requires proving over the long term in many instances, it is likely that these themes will continue to develop and mature, especially given that health remains a global growth business."

Commercial lines appears to favor disaggregation of covers coupled with a move towards active loss avoidance as an area of focus (both predicted at 82 percent traction within five years). "Given the changing patterns of asset ownership — with insurance bundled into other utility services — and the potential for greater levels of autonomous vehicles and plant/machinery, this expectation may not be surprising," Macgregor writes.

Unlike other lines of business, commercial also sees the greatest opportunity for parametric coverages (at 73 percent within five years), possibly linked to catastrophe modeling/active management and connected commercial devices. Although the promise of sensors and connected technologies for commercial appears great, the absence of standards is likely to hamper progress at scale beyond a few specific and narrow market segments in the near term, such as commercial property, aviation, marine, agriculture, among other segments.

"If we are to believe that the proposition will shift from an indemnity-based service towards one of active loss prevention, the skills and capabilities required by an insurer will need to evolve," he writes. "Furthermore, as robotics and AI continue to advance, the next wave of cost reduction is just starting to get underway, potentially leading to leaner and more virtual operations. Although it may not yet be possible to create a totally virtual insurance operation — an algorithm-based business, technology advances will at least enable us to achieve the next jump in operational efficiency."

Macgregor recommends that insurance companies address different perceived levels of change for different business lines; continue to focus on distribution as a distinct area of focus for innovation; and develop a portfolio view towards assembling a market response. "Ultimately, it will be the combination of insurtech concepts that need to be assembled together to deliver a winning proposition," he writes. "However, looking at each concept individually may provide some earlier clues with respect to market traction and the delivery of customer value."