What could insurance from big tech look like?
While Amazon, Google, Apple, and Meta (Facebook) are hardly insurance companies, you may soon be able to buy insurance products from them. Yes, these ‘big tech’ companies are very much eying the insurance space. But what would insurance products from these companies even look like? And how are these companies different from insurtech (if at all)? In this Pacific Prime article, we’ll find out the answers to these questions and much more.
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What is ‘big tech’?
Many people wrongly assume that ‘big tech’ refers to technology companies. In actuality, big tech (sometimes known as tech giants, big four, or big five) refers to the four or five largest, most dominant, and most prestigious companies in the information technology industry of the United States. These include Google, Amazon, Apple, and Meta, as well as Microsoft (when we refer to the big five).
It’s not surprising that big tech companies are amongst the most valuable companies globally. Whether it’s through e-commerce, online advertising, AI and smart devices, or more, big tech companies typically offer services to millions of users, collect ample user data (within the constraints of data protection regulations), and can sway user behavior as well. Of course, one such incident of swaying user behavior was the Cambridge Analytical scandal.
Big tech ventures into insurance
Given the ample data that big tech players have access to, which is the main driver of assessing risk in the underwriting process*, many believe that they might enter the insurance space. In fact, big tech companies have already been offering warranties and product protection for a long time, such as Apple Care. What’s more, they are also expanding into the area day by day such as Amazon’s insurance for businesses in the UK.
So the question is not whether big tech will venture into the insurance sector but whether they’ll disrupt it. Will they align with insurance companies or come up with their own products and/or handle the full underwriting process? Will they focus on a subscription model for insurance that can engage the younger generation? Different insurance experts say different things and only time will tell.
*Underwriting process is the process that insurers use to determine the risks of insurance for a particular individual, group, or business, and subsequently calculate a fair premium for the coverage.
Consumers are keen on insurance from big tech
According to an online survey conducted by Insurtech Breeze, more than half (55%) of consumers said they would be interested in buying a hypothetical insurance product from Amazon over traditional insurance companies. Interestingly, the figure drops to a mere 46% and 28% when it comes to buying a hypothetical insurance product from Google and Facebook, respectively.
Out of these three big tech players, Amazon seems to be the most trusted by consumers to offer insurance products. Breeze suggests that this might be because Amazon has dipped into health insurance before when it launched the since shut down Haven in 2018 and more recently launched Amazon Care. Amazon has also explored financial services like checking accounts, which perhaps makes consumers familiar with Amazon in the areas of personal finance.
How is ‘big tech’ different from ‘insurtech’?
If you’re wondering how ‘big tech’ is different from ‘insurtech’, then you’re certainly not alone as these two terms can overlap quite a bit. A portmanteau of ‘insurance’ and ‘technology’, insurtech refers to any company that is using technology to innovate and disrupt the insurance industry. While big tech companies can become insurtechs, not all insurtechs have to be big tech companies.
In the past few years, insurtechs have been taking the insurance space by storm. Digital adoption in the global insurance sector has been spurred by the COVID-19 pandemic and digital adoption grew 20% across the entire insurance policy lifecycle. So much so that this insurance industry trend has been explored in Pacific Prime’s State of Health Insurance Report 2021-2021.
Get in touch with Pacific Prime today!
If you too would like to be insured by an insurtech or an insurance company that uses technology to enhance the customer experience, Pacific Prime can help you find the right insurance company and plan for your needs and budget. As a global insurance brokerage, we have over two decades of experience working with leading insurers and insurtechs, and 100% impartial and expert insurance advisors on hand to provide our clients with tailored advice.
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With over 5 years of experience in the field, Suphanida spends the majority of her day synthesizing complex pieces of insurance-related information and translating this into easy-to-understand, engaging, and effective content across a variety of media such as articles, infographics, whitepapers, videos, and more.
Suphanida is also responsible for planning and publishing three whitepapers released annually by Pacific Prime: The State of Health Insurance Report, The Cost of Health Insurance Report, and The Global Employee Benefits Trends Report. Additionally, she handles the LinkedIn profiles of Pacific Prime’s Founder and CEO, as well as Global HR Lead.
Suphanida’s strengths lie in her strong research and analytical skills, which she has gained from her BA in Politics from the University of Warwick and Erasmus Mundus Joint MA in Journalism from Aarhus University and City, University of London.
Being of Thai-Indian origin and having lived, studied, and worked in Thailand, the UK, and Denmark, Suphanida also has a unique, multicultural perspective that helps her understand the struggles of expats and globetrotters.
Outside of work, she enjoys traveling to new places and immersing herself in different cultures.
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How might big tech companies handle claims processing for expats needing medical care in multiple countries?
Big tech companies could leverage their vast data resources and AI technology to streamline claims processing for expats by offering real-time approvals, cross-border compatibility, and personalized support. Their ability to integrate healthcare provider networks globally and facilitate seamless digital experiences could simplify medical care access across multiple countries. However, while promising, it remains to be seen how these companies will address challenges such as compliance with diverse regulations and safeguarding user privacy.
For tailored advice on international health insurance solutions that meet your needs today, contact Pacific Prime through our Contact Us page.
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