If Amazon and Google decide to muscle in on the insurance industry, both companies may have ready buyers. Should established insurers be worried?
With insurtech startups on the rise, established insurers and agents have to adapt if they hope to stay competitive. Indeed, a recent survey from J.D. Power revealed that one out of every five consumers would be open to buying homeowners insurance from Amazon or Google.
Even more interesting for the insurance industry, 80% who said they’d consider moving their homeowners insurance to either of those companies currently own a policy with a major carrier. Millennials especially liked the idea, with 33% saying they’d buy homeowners insurance from Amazon, while 23% preferred Google.
J.D. Power compiled the results after questioning 650 consumers in August. Not only did they indicate a willingness to buy from a non-traditional insurers, they also declared what they want from their homeowners insurance company.
Home is Where the Tech is
As homeowners install high-tech systems to monitor everything from security to property issues, 75.2% said they should receive discounts from their insurers for doing so. Already these devices are in widespread use: about 60% of consumers told J.D. Power researchers they have some type of sensor technology in their homes, such as a smart thermostat.
In order to prevent loss or warn of a breakdown, 46% would allow their insurer to access data from their home sensor devices. More than half of homeowners who currently own smart home technology said they would be willing to have their carrier coordinate with their tech systems.
A third (34%) of the J.D. Power respondents said they’d switch their homeowners insurance to a carrier that offered home technology options to prevent loss. The percentage among millennials was even higher at 57%.
J.D. Powers also asked about areas where homeowner insurers could upgrade their services to their policyholders. Topping the list was improved product options and coverage (20%), followed by underwriting expertise (15%) and claims processing (14%).
Amazon & Google Want In
Both Amazon and Google appear determined to make headway in the insurance industry. Earlier this year, Amazon teamed up with Berkshire Hathaway and JPMorgan Chase to form a healthcare plan for their employees.
Amazon is also reportedly negotiating with several European insurers to set up a price comparison website in the U.K. During the summer, a report surfaced that Amazon was also contemplating selling homeowners insurance alongside smart home devices. As the J.D. Power survey uncovered, if the online retailer decides to enter that market, many consumers would take it up on the offer.
Google’s first attempt at insurance failed in 2016 when it shuttered its Google Compare auto insurance site. Google reversed course recently and made another go. Its autonomous car development unit, Waymo, and insurtech startup Trov partnered on a venture that would permit riders to buy insurance based on the length of rides in a Waymo vehicle.
Where Agents and Established Insurers Fit In
Though insurtech upstarts such as Trov, Lemonade, and Metromile may be well-known in insurance circles, their name recognition remains low among the public, according to a J.D. Power survey. Yet nearly all Americans know and use Google and Amazon, which makes them a leading disruptive threat to established insurers.
Insurers and agents can stay ahead of the curve by getting up to speed on the latest capabilities that consumers want from their insurance providers. After all, one of the attractions of Amazon and Google is the ability for consumers to complete transactions seamlessly on intuitive digital platforms.By enabling clients and prospects to review policies, purchase coverage, and submit claims online, agents can create a better overall customer experience. At the same time, agents must be sure to engage personally with their clients through digital channels or face-to-face meetings. While the ease of using Amazon and Google may be attractive, investing in your professional relationships with clients is a great way to make them feel like less of a number and more of a person with specific insurance needs.