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August 7, 2018

Will Apple enter insurance? Google? Microsoft? Amazon?

Summary:

Apple’s market value crested $1 trillion last week, and its big-tech brethren Google, Microsoft and Amazon aren’t far behind; all are valued at north of $800 billion. But to justify their valuations the companies need to keep gobbling up other markets.

Might insurance be on the menu?

All have at least dabbled in insurance, and all will go wherever they see major potential — in the words of omnivorous Amazon CEO Jeff Bezos, “Your margin is my opportunity.” At a time when digitization is the key struggle for insurers, all have decades of experience with smooth, efficient, automated processes. All know how to produce a great customer experience. All have extensive data about customers. And all have the size to tackle the mind-bending problems that insurance faces — by contrast, you’d have to combine AIG, Prudential and Allstate just to surpass $100 billion in market value, let alone $800 billion or $1 trillion. 

There are natural limits to big tech’s interest in insurance. The companies — let’s call them AGMA so we don’t have to get into a MAGA discussion — are allergic to heavy regulation. “Move fast and break things” works in Silicon Valley, but no insurance regulator would allow that approach. AGMA also believe in asset-light businesses. None wants to put up the kind of capital that is required in insurance. 

But insurance generates trillions of dollars of business a year worldwide — a big number even by AGMA standards — and many incumbents look like easy targets. So, which AGMA company makes a big move first? When? And what will that first move look like?

I hope you’ll join me in a discussion to try to answer those questions. Our mantra at ITL has long been, “No one is as smart as everybody,” and I think we’ll come to a better answer together than we will individually. I set up a discussion two weeks ago to focus on another issue related to innovation, the KPIs that can be used to measure progress for corporate programs, and found the interaction fascinating. I’m now posting for discussion this question about what big tech plans. I’ve tried to seed the discussion with a fair amount of background on what the companies have done and have said about their plans.  

If you aren’t already a member of our Innovator’s Edge platform, to join the group you can just click here. Registration is free and fast. Then click here to see the group discussion. The process is painless — and could be enlightening.

Have a great week.

Paul Carroll
Editor-in-Chief 

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About the Author

Paul Carroll is the editor-in-chief of Insurance Thought Leadership. He is also co-author of Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years and the author of a best-seller on IBM, published in 1993. Carroll spent 17 years at the Wall Street Journal as an editor and reporter; he was nominated twice for the Pulitzer Prize. He later was a finalist for a National Magazine Award.

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