Research by GlobalData reveals almost a third of consumers would buy their insurance from tech conglomerates
Research has revealed that over 30% of UK consumers would consider switching from their current insurance provider to a retail or technology powerhouse such as Amazon or Google.
GlobalData revealed in its latest report, ‘The Impact of Alternative Providers in Insurance,’ that this suggests an opening potential of around £9bn in UK gross written premium.
Daniel Pearce, financial analyst at GlobalData, explains: “The technological capabilities of these alternative providers far exceed those of current market incumbents and with consumers open to purchasing an insurance product from them, the demand is also there.
“Should the likes of Amazon and Google enter the insurance industry, disruption will be widespread, particularly within the home, motor and travel markets where consumers are most open to purchasing some form of insurance product.”
The report also suggests that 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.
Pearce continues: “The threat which is often talked about within the industry is from these alternative providers; however, 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.
“Over the next two years, the threat posed by both alternative providers and reinsurers will likely become a reality. However, from a consumer perspective, increased competition in the market and the implementation of the latest technologies will only prove to be beneficial with the potential for lower premiums and increasingly personalised products.”
Amazon has already teased an entry into the insurance market after advertising for an insurance product manager, meanwhile, Google’s sister company has invested in a start-up company based in India.