Amazon and Google Could Be Your Insurance Company
Google & Amazon Want to Become Your Insurance Provider
According to a recently released J.D. Power survey, one in five consumers claim they would use Amazon or Google for their homeowners insurance. There are have been rumors that the two tech giants may be considering an entry or in the case of Google, a reentry, into the insurance market although neither has confirmed those rumors.
Earlier in the month, reports came out that Amazon was talking to insurance firms in Europe about contributing to a U.K. price comparison website but nothing concrete had been confirmed.
Google, on the other hand, has already made an attempt to enter the insurance market but pulled out in early 2016. Industry expert Tom Super, director of J.D. Power property/casualty practice doesn’t think that Google will be giving up that easily though, “I don’t think they’re done trying,” Super said in a recent Insurance Journal article.
Brand Awareness is Key
The J.D. Power survey found that only 6 percent of consumers were aware of the already existing insurance alternatives that are using technology to change the industry. Lemonade, Metromile, Trove and Sure have been working to change the insurance landscape but as the J.D. Power survey clearly shows, they lack the brand awareness that an Amazon or Google would bring.
“They may present a greater threat to home insurers if they decide to move into that space,” Super said in the Insurance Journal article. “It’s Amazon and Google that are potentially a bigger threat if we’re thinking about outside disruptors.”
Super went on to say that major insurance carriers should consider the survey a “wake-up call” and that they should be preparing to enhance their online presence and offerings. As technology continues to disrupt the insurance market, major insurers will need to offer a bigger and better online experience to make sure they stay competitive.
Industry experts feel that insurers are already tech savvy and are prepared if tech companies such as Amazon and Google get into the business.
“I feel like the insurance industry has fully embraced technology,” Alex Hageli, director of policy, research and international for the Property Casualty Insurers Association of America said in the recent Insurance Journal article. “It’s on par with anyone else that would engage online. The industry is well-equipped to weather competition from other possible entries into the market. I feel that the insurance industry is much better prepared, much better prepared.”
Millennials Ready to Switch
The J.D. Power survey found that Millennials have the highest interest when it comes to using Google or Amazon to insure their homes. A whopping 33 percent would be happy to use Amazon while 23 percent would be good with Google.
Millennials already have a deep relationship with tech companies and tend to trust both Amazon and Google, making them more comfortable with the switch to tech companies for their insurance needs.
However, traditional insurance agents feel that the relationship may sour once a homeowner has to deal with a loss that isn’t covered because they were sold the wrong product or they have questions that cannot be answered by a tech company call center.
“Chatbots and service centers, which I think will be what is required to truly make the alternative sources of insurance marketable in the long-term, know nothing about me,” said Christopher J. Boggs, executive director of the Big I Virtual University in the Insurance Journal article. “Yes, they may have some basic data about me and my family in their computer, but they know nothing about me like a live agent who lives and works in my community and truly understands my situation beyond pure data – on a human level.”
What Consumers Want
The J.D. Power survey asked consumers what areas of their relationship with their home insurance company needed improvement. The answers shook out as follows:
- Product options/coverages: 20 percent
- Underwriting sophistication: 15 percent
- Claims: 14 percent
One major improvement that consumers are looking for according to the survey is getting a discount for home telematics that monitor the security of a home as well as ensuring that the homeowner is doing proper home maintenance. A surprising 72 percent would like to see insurers add this feature to their tech offerings.
The survey found that 34 percent of consumers would switch to a home insurance company that offers smart home technology. This number jumps up to 57 percent of Millennials.
Consumers aren’t waiting for insurance companies to offer discounts before they install smart home technology. The survey found that 64 percent already have some smart technology in their home such as a thermostat or doorbell. The survey also found that 46 percent of consumers would be willing to share information these devices collect with insurers as long as they get something in return such as a discount.
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