Brokers to Face Competition from “Insurtechs” such as Amazon and Google
There is a theory that Amazon could soon enter the insurance industry with a product of its own.
Amazon has been exploring this industry for some time now. They have been reportedly entering partnerships with AIG and Berkshire Hathaway, which are both large insurers. It is believed that Amazon will create its insurance product to compete with other insurers on price and convenience.
Traditional brokers will face competition from tech companies such as Amazon and Google, as 55% of consumers would be interested in buying a hypothetical insurance product from Amazon over traditional insurance brokers.
The advent of insurtechs has not only changed the insurance industry but also created new opportunities for brokers to work with these innovators and other insurtechs. This is because they can offer services that brokers cannot.
Google, for instance, has partnered with AIG, an insurance company to integrate Google’s voice-powered assistant into their products. This will make it easier for customers to access their insurance information and purchase new policies. These partnerships enable both parties to tap into each other’s strengths and skills – Google provides consumer knowledge and AI-supported data engines, while AIG offers distribution channels. They also address customer needs in the most efficient way possible; Google by providing them with information at their fingertips; AIG by providing the actual policy.
When you think of social media, the first companies that come to mind are Facebook and Twitter. And when you think of search engines, the first company that comes to mind is Google. But when it comes to insurance, the question is whether consumers would turn to Amazon, Facebook, or Google for insurance?
Some believe that people would trust Amazon more than they would trust Facebook or Google because Amazon has a better reputation than the latter. From sales on its website to customer service in its physical stores, Amazon has built up a good reputation for dependability over time.
Amazon has ventured into the healthcare industry with its new insurance product. This will give them a competitive edge which they have not held for a while. Amazon also announced the addition of new outpatient care benefits to its employee health insurance plans. This will enable Amazon employees to have convenient, cost-effective care outside of the emergency room, urgent care centers, and hospital emergency departments.
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.
As consumers get more comfortable with online shopping, they are starting to purchase insurance at the same online stores.
This is because of the convenience of doing so, and because it feels like it is unavoidable.
Online purchasing of insurance will not replace the need for brick-and-mortar locations, but it is a change in consumer behavior that will likely continue to grow.
Companies like Google, Apple, and Amazon are investing in insurtech. The reason for this is the aging population which leads to an increase of people who need medical or life insurance.