Strategic resistance: the irrational competitor

The biggest obstacle to innovation in insurance isn’t technological inadequacy. It’s the irrational competitor phenomenon described by Admiral Group’s founder Henry Engelhardt. The irrational competitor is the player that sets aside technical profitability and is willing to lose money for nothing but a market share that will shine in press releases. Playing on the same field as them, acting rationally often turns into a disadvantage.

This phenomenon also explains why every sensible move in insurance doesn’t work. A rational player looks at profitability; the irrational competitor accepts losses to grow market share. In the short term it cuts price, buys visibility and pressures the rational rival on its own field. So technology-focused players entering the industry from outside often hit this irrational resistance, even though they offer a better product.

The carrier cartel’s resistance

There’s an interesting picture: while comparison sites dominated the industry in the UK and created billion-dollar giants, in the US even giants like Google and Walmart failed in this model. This isn’t a technology failure, it’s a strategic resistance. The big US insurers built a multi-billion-dollar marketing barrier to keep the consumer from going to a transparent comparison platform. The aim is to steer the customer away from transparent price competition and toward brand loyalty or their own agent.

Manufactured friction

Another reason for the difference is the lack of regulation and data standards. While switching insurers in Europe is a smooth process, in markets with multiple regulators like the US the same operation is deliberately made cumbersome. Incumbents use this systemic complexity and data fragmentation as a defensive line against technology-focused rivals from outside. So friction is sometimes not an accident, but a strategy.

From the illusion of disruption to cooperation

Many insurtech startups set out claiming to tear down the existing order. But before long they found themselves as the authorized general agents of the very giants they were trying to tear down. They learned the hard way that you can’t gamble against the house in insurance, that the house always wins. This isn’t a failure, it’s learning the physics of the industry.

In markets like Turkey the lesson is the same. While comparison and digital-distribution models grow, brand power, agent relationships and regulation are still strong points of resistance. These points shouldn’t be ignored but understood and grasped from the right side. The player who knows where and why resistance appears can turn it from an obstacle into a lever.

The real key: data and standards

The quietest but most decisive layer of this resistance is data. Industry data is fragmented, its standards weak, and often deliberately kept closed; because open data makes transparent competition and the entry of new players easier. That’s why the open-insurance debate is so heated in Europe. Whoever opens the data and the standard largely sets the rules of the game.

So for a player coming from outside the strategy is clear: first understand the physics of the industry, that is, what is kept closed and why, then build the operational and technological superiority to overcome that closedness. Rather than seeing the resistance as a wall and headbutting it, you have to find where its door is.

Another lesson here is that speed and show can be misleading. The irrational competitor wins market share and headlines in the short term; but no model with broken technical profitability survives in the long run. The patient and disciplined player is still at the table when the storm subsides.

My takeaway is clear: rather than challenging the industry from outside, you have to map the resistance points and enter through the weakest link, often operations and data. The revolution slogan is easy; the real work is understanding the resistance and positioning accordingly. In this industry the winner isn’t the one who speaks loudest, but the one who stays standing longest.

Managing not the revolution, but the resistance

The successful companies of the future won’t be those who start a revolution against the industry. On the contrary, those who understand the roots of the existing resistance and, instead of fighting these resistance points, can turn them to their own advantage will win. If you want to transform the industry, you must first understand why it’s so resistant. If you can’t tear down the giants, you build the technological and operational superiority to transform the system from within by joining them. The point isn’t to tear down, but to rebuild the system.