In the last few years, Google, Apple, Amazon, and Facebook have made news for their activities in the financial systems industry, specifically — digital payments. While their footprint in the insurance market may not be as well-publicized, it is substantial – and booming.
Now because these major tech giants have spent extensively in healthcare technology projects such as personal health tracking and virtual care, they have been able to effectively incorporate these features into health insurance policies. Indeed, Google subsidiary Verily established its very first insurance firm in 2020 to offer tech-driven corporate health insurance coverage.
To add to this, subsequent investments and affiliations hint that the businesses are also increasing their interest in the life, property, and casualty insurance sectors. Amazon, Google, and Apple, for instance, have all buddied with John Hancock’s Vitality to distribute health monitoring wearables to its life insurance customers, while Amazon and Facebook are harnessing their platforms to market Property & Casualty policies in India.
The Biggest Threat to Insurers –
Tech Giants have several opportunities over conventional insurance companies, including the data, existent client base, and distribution networks needed to effectively serve insurance buyers in a more seamless and digital manner.
They also have the technology to enhance essential insurance activities, such as underwriting and payouts, by employing their smart home appliances and wearable product lines. Wearables, in particular, which continuously gather real-time information on your health activities, can assist life insurers in accurately assessing health risks, resulting in more precise underwriting.
Likewise, smart home devices can detect an accident (for example, a water leakage) and initiate an immediate response (like shutting off the water supply) to reduce or even eliminate damages from happening.
Lastly, insurers are rapidly migrating their data to the cloud and leveraging AI. These are, in fact, the very areas where these major tech firms thrive — and where they are effectively driving significant digital actions for insurers.
Today, all the major players in the tech space generally function as digital catalysts or channel partners for insurers. However, insurance companies are in danger of becoming commoditized if they hold onto the same old data, analytics, and distribution channels.
Arguably, the most concerning element here for traditional insurers and agents is that consumers are growing eager to purchase insurance from these large Tech Giants because of the brand recall. According to a recent Capgemini study, 44% of the customers are keen to get insurance from a company like Google and Amazon, rising from a meager 17% in 2016.
Let’s consider Google as an example –
For a while now, Google has expressed an immense enthusiasm for insurance. Most prominently, in 2015, it launched Google Compare, a personal vehicle insurance comparison platform with plans from insurers such as CoverHound and MetLife. Google eventually discontinued the product the following year, but its funding and spinoff activities plainly indicate that the firm has not abandoned the sector.
Google has financed 14 InsurTech Companies through its parent organization — Alphabet and its predominant financers, capitalG, and Google Ventures since 2014, more than any of its major FinTech rivals.
Summing Up –
While Google made investments in almost every major industry, its direct and active involvement in life and health insurance had been through its subsidiary Verily. Verily teamed with John Hancock in 2019 to offer diabetes-specific life insurance coverage. Because of the increased death rates tied with diabetes, life insurance is sometimes more expensive – or perhaps unaffordable – to diabetic patients. John Hancock gave virtual care and rewards to living better lifestyles to its diabetic life insurance clients by leveraging Verily’s digital, data-driven platform, allowing the firm to appropriately cover these consumers at reasonable pricing.
Google bridged the gap between the massive yet dormant potential in the insurance market by linking it to technological advancements. And that quite explains the lurking of Tech Giants around here.
Ditto believes – Buying Insurance should be as easy as buying a house or car. Their mission is to make it that way.