Data and analytics company GlobalData has encouraged health insurers to partner up with tech giants. The firm thinks that seeing the entrance of entities such as Google, Amazon and Apple into the insurance space as an opportunity rather than a hostile act to defend against would be a positive step for the industry. Amazon, for example, announced a collaboration this year with JPMorgan and Berkshire Hathaway, through which it will create a healthcare company to serve its US employees.
“The insurance industry has been nervously tracking the activities of potential alternative providers,” said Danielle Cripps, a Life & Pensions Analyst at GlobalData. “It was uncertain which area of insurance would witness their entry or when it would occur, but over the last few months it has become increasingly clear that tech giants are targeting the US healthcare market.”
Strategically, it does on the face of it seem prudent to welcome the arrival of companies such as Google and Amazon, both of which have demonstrated staggering success in terms of customer loyalty. After all, insurance companies have traditionally struggled with positive PR and customer retention, and perhaps they could learn a thing or two. However, caution should remain a watchword, as Google and Amazon have also made a habit of dominating every space they enter, and insurers may not wish to cede too much territory.
“The race into US healthcare among alternative providers has truly begun,” continued Cripps, “but each has a different approach. Amazon has opted to tackle the healthcare market using its power as a large US employer to drive market change, such as lowering healthcare costs and improving services for employees. On the other hand, Apple seems to be concentrating on creating a more connected service between customers and healthcare providers. It is positioning itself as a potential partner for healthcare providers and healthcare insurers. Meanwhile Google, which is still feeling out the market, is looking for partnerships. It may likely see itself in the role of an insurance distributor.”
Needless to say, it will be interesting to see how this all plays out.