Brokers could face competition from 'insurtechs' such as Amazon and Google
In the age of online shopping, is there anything consumers wouldn't buy from Amazon?
The popularity of online shopping has soared during the pandemic. Now many consumers would consider purchasing insurance at some of the same the places where they buy clothes, books or groceries, according to survey data from Breeze.
Tech companies are pouring money into what is known as “insurtech.” CB Insights estimates that global investments reached $10.5 billion through the third quarter of 2021, which was 48% higher than 2020′s year-end total.
The big question is whether consumers would turn to Amazon, Facebook or Google for insurance. Breeze put this question to the test by surveying 1,500 adult consumers. The majority would buy insurance from Amazon but not Facebook or Google. Fifty-five percent of consumers would be interested in buying a hypothetical insurance product from Amazon over traditional insurance carriers. Only 46% and 38% said the same for Google and Facebook, respectively.
Amazon has ventured into health insurance before when it launched Haven in 2018, and more recently, Amazon Care. Moreover, Amazon has explored other financial services, such as checking accounts, so there is some consumer familiarity when it comes to Amazon and personal finance.
“Insurers should expect leading tech companies such as Google and Amazon to extend their influence into the sector,” according to PropertyCausalty360. “By leveraging their information and analytics to state firms, these companies could create a new stream of digital resources. Carriers can turn to such firms and form partnerships through which insurance products can be personalized. Tech companies bring a burst of creativity to the insurance market, setting a new standard in product distribution.”
In fact, 59% of survey respondents would be interested in buying health or life insurance from a health and wellness company or pharmacy such as CVS or Walgreens instead of from a traditional carrier, while 41% would not. Fifty-one percent would be interested in buying disability insurance from a payroll and HR company such Zenefits or Bill.com instead of from a traditional carrier. Forty-nine percent would not.
“It’s an opportune time for tech companies to get a seat at the insurance table,” Breeze concluded. “They have robust data and technological infrastructure that could be leveraged to underwrite and sell insurance products.”