DAO will definitely be the solution in my opinion.
There are so many insurance frauds in recent days and decentralizing the whole industry just makes a lot more sense to ensure that fraud is kept to a minimum and any insurance claims are processed in a fair and reasonable manner.
Although, there needs to be a good protocol that comes out that allows this to occur, because security of funds is definitely one of the foremost concerns on everyone's mind when participating in a DAO of this nature.
The concept is great but the actual implementation would be hard as it depends on the insurance company if they will adopt the DAO system or not. There are benefits of being transparent as it will hasten the long process in the insurance industry. If one big company will showcase the use of blockchain tech and show how they are doing and performing, it may be a very good example so these insurance companies will follow thru. There are already several insurance companies that are integrating blockchain tech in some of their operations. But no known big insurance company is known to have fully integrated blockchain tech up until now. I like blockchain tech owed to its transparency nature, because the adjusters or third party experts are prone to human bias.