In­sur­ers find Google a po­ten­tial ri­val

The Pak Banker - - COMPANIES/BOSS -

NEW YORK: More than 40 per­cent of in­sur­ers see Google as a po­ten­tial threat be­cause of its strong brand and abil­ity to use cus­tomer data, a re­port re­leased on Tues­day said. 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 Wal Mart 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 heav­i­lyreg­u­lated 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.

"Google will not be­come an in­sur­ance un­der­writer," said Nigel Walsh, head of UK in­sur­ance at Capgem­ini.

But with prod­ucts such as Nest, "they are a mas­sive part of the in­sur­ance value chain, be­cause of what they know about con­sumers," he added.

The in­sur­ance in­dus­try also needs to im­prove its ser­vice if it is go­ing to win busi­ness among younger cus­tomers.

Only 34 per­cent of cus­tomers below the age of 35 re­ported pos­i­tive ex­pe­ri­ences with their in­sur­ers, com­pared with 55 per­cent of over 35s, a Capgem­ini sur­vey of more than 15,000 cus­tomers in 30 coun­tries found.

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