In the first of two articles Matt Lane, CEO, Intermediary and Market Services at Davies looks at the lessons the industry can take from the risks of the past.

The market is poised for a transformative leap in productivity, driven by digital infrastructure advancements and strategic data use. Industry experts predict the specialist insurance sector may soon become unrecognisable. This evolution brings both opportunities and risks—from the collapse of high-profile InsurTech startup Vestoo to ongoing market modernisation setbacks. With John Neal’s departure, many are questioning whether a new direction will supersede his once-ambitious Future at Lloyd’s vision.

Two hundred years ago, the Industrial Revolution ushered in a similarly profound transformation. If we hope to realise the full potential of today’s information revolution—swiftly and with minimal disruption—we should reflect on the lessons of the past.

In the early 19th century, the steam engine transformed society by freeing us from the limits of manual labour. Harnessing coal—a cheap, concentrated, and seemingly limitless energy source—it powered rapid industrialisation, slashing transport costs and timelines. Manufacturing, construction, tourism, and sport all boomed, launching global market integration and economic growth: the dawn of modernity.

Today’s equivalents—blockchain, AI, automation—are fuelling a similar shift. And just as coal provoked scepticism in its time, data as the new fuel of innovation faces its share of modern-day Luddites. Where 19th-century industry pulled workers into cities, the 21st-century digital economy is enabling decentralisation and remote working. Yet the key question remains: how do we harness disruptive innovation without losing control of its risks?

These innovations are not just technical—they’re reshaping how business is done. From embedded insurance to real-time risk monitoring, the pace of change is dizzying. What’s needed is not just openness to transformation, but a framework that preserves what works.

Four lessons from history

1. Entrenched incumbents

In 1825, the Stockton-Darlington railway marked a step change in transportation. Dominant canal companies responded by building rail lines alongside their canals to tow barges—an ultimately futile effort to stay relevant. Today’s technology incumbents may face similar challenges. Can firms that built yesterday’s infrastructure reimagine it for tomorrow? Buyers and market participants are right to be sceptical.

This is especially relevant in insurance where legacy tech stacks—built over decades—struggle to integrate with agile, cloud-based platforms. The lesson? Disruption doesn’t wait for comfort.

2. Distractors

Not every bold innovation succeeds. The submerged Brighton and Rottingdean Seashore Electric Railway is a case in point—ambitious, but short-lived. This mirrors today’s tech landscape, where even promising advances like generative AI must be assessed on real-world, production-ready merits. In fast-moving markets, discernment matters.

Insurance is full of pilot projects that never make it to scale. Leaders must ask: are we chasing novelty, or solving real problems? Being early isn’t the same as being effective.

3. Irrational exuberance

Railway Mania in the 1840s saw speculative investment outpace coordination. Rival companies laid incompatible tracks with different gauges, forcing passengers to switch trains mid-journey. Today’s insurance industry faces similar fragmentation—platforms, data standards, and ecosystems that don’t talk to each other, leaving underwriters and brokers burdened with manual processes.

This lack of interoperability isn’t just inefficient—it’s a risk. In the 1840s, Parliament stepped in with the Gauge Act to restore order. Similarly, insurers today might benefit from data and process standards—not to stifle innovation, but to help it scale.

With multiple vendors and protocols competing to become the default, the industry risks embedding inefficiencies. Standardisation must be collaborative and rooted in long-term value.

Lloyd’s recent shift from centralised development to a market-supplied solution (via Velonetic and the transfer of DAM to LIMOSS) reflects this principle: encourage free-market solutions within a shared, functional framework.

Looking ahead: bridging the eras

One thing is clear: the lessons of history are far from obsolete. Emerging technologies may differ in form, but the dynamics of change, disruption, and adaptation remain strikingly familiar. For insurance professionals, understanding how past revolutions unfolded can sharpen our approach to the challenges ahead.

It’s also a reminder that innovation without coordination—or ambition without commercial fit—is a pattern as old as progress itself.

Originally posted in Emerging Risks.

If you would like to continue the conversation, get in touch with Chief Executive Officer, Matt Lane at matt.lane@davies-group.com