What makes insurers wary of Google
And young, mobile phone-friendly consumers may bypass traditional insurers for “new, more nimble” competitors, consultancy Capgemini’s annual world insurance report said.
Google beat other household names Amazon and Walmart as the biggest new entrant threat, based on interviews with more than 150 insurance executives.
Insurers are looking to use technology to gain more information about their customers and potentially offer them lower-cost insurance.
This has already happened in car insurance with telematics — the use of a black box in cars to see how safely customers are driving.
One of the next areas for insurers is the connected home — with technology that enables you to turn off your oven from a distance if it has been left on, for example, potentially avoiding a fire.
Google owns connected home products maker Nest, which could act as a springboard to providing insurance.
“To withstand the coming competition, insurers must build up their brands, learn to take advantage of real-time customer data, and develop agile operating models,” Capgemini said.
However, some insurance industry specialists doubt that technology companies will enter the heavily-regulated insurance sector directly, seeing them as more likely to form partnerships with insurers, potentially giving those firms an advantage.
In the United States, Liberty Mutual has already joined up with Nest to offer insurance discounts for Nest users.