The UK insurance market remains vulnerable to the entrance of alternative providers such as Google, Apple, Facebook and Amazon, a new report from GlobalData has claimed.
According to the data and analytics company’s report, The Impact of Alternative Providers in Insurance, 30% of consumers would purchase some form of insurance product from certain providers.
With an opening potential of around £9 billion in UK gross written premium, the likes of Google would be willing and best placed to enter consumer insurance markets, according to GlobalData.
In its report, GlobalData used the example of home insurance, with almost a fifth of consumers open to purchasing policies from Google, which has the opportunity to leverage its smart home devices in this space, particularly as insurance is increasingly reliant on thoroughly understanding the customer, implementing technology to effectively pre-empt a number of claim situations and being a brand that is trusted.
Daniel Pearce, financial analyst at GlobalData, said: “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.”
Pearce added: “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.”