Article Synopsis :
Whether you believe it or not, says Tällt, the tech giants Google, Amazon, Facebook or Apple (GAFA) will be moving in on the industry in the very near future.
There will be significant market disruption when they do. Some British price comparison brands saw a 10% drop in their share price because Amazon held talks with UK insurers.
Lowest common denominator
They also have access to an awful lot of personal and purchasing data on millions of consumers around the world.
Complacency can kill
Incumbents should not consider the risks to be remote. Though insurance is heavily regulated, giving existing players the edge. And yes, Google has failed in the past to compete in price comparison on both sides of the Atlantic.
But they are not set back by failure in the same way. They still think like startups, get up, dust themselves down and try again.
Don’t expect loyalty
And consumers will buy, too. In April 2018, GlobalData reported that more than 30% of UK consumers would consider switching their insurance to a GAFA product.
So, the tech giants are coming for the insurance industry. Look at the amount they are investing, recruiting, acquiring.
They see this is a valuable market and want a piece of it. How quickly the rest of the market catches up will likely determine how much they get of it and how any early partnerships with GAFA develop.
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Digital Insurer's CommentsThere’s nothing very surprising here, but it’s good to see it put simply: evolve or die.
The paper also carries a number of profiles of GAFA, incumbents and ones to watch.
Innovation alone is not going to be enough, but once we see some players – even household names – fall away, that will be no doubt be the moment of motivation.
Whether it is too little, too late, only time will tell.
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