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It often seems that companies like Google and Amazon are omnipresent (and omnipotent) in business today. From our online searches to digital purchases and from television to cloud storage, big players in tech are constantly expanding their offering and influence. Is insurance next?
The short answer is yes: it is likely that the presence of these businesses will increase in the insurance industry as time goes on, but the extent of the role they play is yet to be decided. They could create their product lines, lend a hand to existing insurers, or change the game regarding distribution. Given the masses of data regularly collected by these companies, their ever-growing reach when it comes to knowledge is likely to be a factor in their future activity in the insurance industry.
It makes sense that tech heavyweights direct their influence towards insurance, as the industry becomes increasingly digitized: a 2021 Accenture report even concluded that by 2025, $140 billion of current insurance revenues are likely to change from traditional to technology-enabled insurance products. The report also surmised that in the next five years, another $140 billion of revenues in traditional insurance distribution have the potential to be displaced by insurers offering digital distribution experiences as customers purchase insurance on digital channels and third-party platforms. A technological revolution is already shaking up the insurance industry, and key players in tech are expected to capitalize on its evolution.
Data is sure to be a factor in the P&C revolution
Of course, when discussing the impact of big tech, we cannot forget the influence their gigantic data stores provide. These companies already amass masses of data, and as their products develop (think AR glasses or VR goggles) they will find new ways to collect this data, and new kinds of data to target.
The availability and different ways of retrieving this data for insurance companies are likely to grow just as key tech companies build on their databases, and forward-thinkers will capitalize on the increased knowledge they can access. The data’s insights will allow insurers to break into niche markets, make more informed decisions when assessing risks and offer customers more accurate quotes. Google is already changing the game to provide insights from its data, announcing new search result capabilities for its users that provide information on doctors, such as which insurance providers they accept and what languages they speak in their offices.
When it comes to product distribution, creativity is key
Big tech is not only likely to use its data to help insurers; its distribution abilities are sure to develop too. The creativity with which this is done will be important and influential, as Amazon has proven how it recommends products. The recommendation concept has spilled over into many different industries as companies build personalized product lines based on customers’ changing needs.
On creative distribution, Amazon really knows the market inside and out: It makes products extremely easy to purchase across many industries, just as today’s consumer needs. Today, customers can digitally and instantly purchase things, from tech and clothes to trips and cars. Disruptors in the insurance industry will question why the same cannot be true for insurance products and take steps to make that happen for multiple lines and customized product bundles. Big tech can offer the notion of constant availability growing from a wealth of resources and creative means of distribution.
Big tech is sure to influence customers’ choices in a variety of niches and how they make those choices. Thanks to technology innovations spearheaded by leaders like Apple, Google, and Amazon, consumers are bombarded constantly by choice today: what product to buy, what device upon which to buy it, which store from which to purchase it, how to pay for it, and more. This makes many markets, including that of insurance, more competitive than ever, and the forward-thinking insurer will prepare for this by expanding their own technological offering. Businesses must use every innovation available to them to leapfrog competitors in the race to win wallet share. We may not need to expect “Google Insurance” just yet; but if big tech can help carriers out, quick-thinking insurers will capitalize on the opportunities they offer.