Consumers willing to buy insurance from tech giants
Written by Mark Evans
The UK insurance market remains vulnerable to the entrance of ‘alternative providers’ such as Google, Apple, Facebook and Amazon (GAFA), and nearly a third (30 per cent) of consumers say they would purchase some form of insurance product from these providers.
The figures come from GlobalData’s latest report: The Impact of Alternative Providers in Insurance and suggest an opening potential of around £9bn in UK gross written premium. Whilst the sector has just recently awoken from a long fallow period it is now comparatively surging with innovative energy and insurtech propositions, however, with the industry still learning to build closer engagement with customers, there is a clear opportunity for ‘alternative providers’.
Amazon, Google and Facebook remain the biggest potential disruptors, although it should be noted that figures were obtained before the data scandals of recent weeks.
However, with that in mind, with almost a fifth of consumers were open to purchasing home insurance from Google, and there is a clear opportunity for Google leverage its smart home devices in this space (for Google also read Amazon, Apple et al). The requirement for insurance is moving into territory where the ability to thoroughly understand the customer, implement technology to effectively pre-empt a number of claims will be major issues – as will reputation and brand. The jury is out on who might win that one.
In order to overcome the potential threat of alternative providers, insurers would be best collaborating with these companies in order to leverage their knowledge of the latest technologies and further enhance their product offerings. But it is a gamble, as these providers also possess the ability to ‘go alone’ at some point. Insurers should also be aware of the potential threat posed by reinsurers, who have been investing heavily in a number of customer-facing insurtechs and may be in a position to bypass primary players.