How Google, Amazon May Lead Disruption

In response to a great piece here by Barry Rabkin, I have a strong opinion. That doesn't mean to say I'm right here, but I'm reflecting all the customers and partners I have spoken to at length on this topic over the last many months. Barry, really interesting piece. I hear this question nearly every day, about whether Google, Amazon and other tech giants will enter the insurance business. I have heard this nearly every day for the last 24 months now, maybe longer. This question won’t go away and will continue to spark ideas and pique the interest of individuals and boardrooms up and down the country, fearful for the large, digital, (perceived) nimble enterprises that could engulf them in a swift clean swipe. I think if you break the question down further -- to personal and commercial lines -- the story may evolve even further. Take the small and medium-sized enterprise (SME) side, particularity the S part of this. These organizations (and I include our traditional carriers here) have an ideal opportunity to further leverage what they do so well today, but, as you point out, it's well known what they do and how to imitate or improve on that. While I agree with you that Google, Amazon, et al. are highly unlikely to become direct insurers themselves, they are already heavily involved in the insurance value chain as creators and orchestrators of data. These organizations are data companies, and we are an industry of risk-based data. We have some good examples already of Google in the U.S. providing advanced weather data and subsequently crop insurance. In the UK, Google has an insurance price comparison site, albeit loss-making at present – however, don’t let this fool us. These are the guys who help create the data, the Internet of things (IoT), Internet of customers or Internet of everything (whatever today's buzz word is) -- from your mobile location (Nexus, Android), your home (Nest, Google TV), your location (driverless cars, maps, Android), your health (wearables) and so much more! This volume of data on us as individuals has immense value and power in the right hands to reduce the inconvenience in our everyday lives. However, what if Google and Amazon were to partner in the same way they do with hardware providers for mobiles and other devices with a re-insurer, not having to worry about the things you clearly highlight and instead focus on the one thing they do well – the customer (Google), the supply chain (Amazon), the experience (Apple) and the community (Facebook)? You would have a very powerful story! (Queue scary music!) What if this community were to all club together with the digital networks and relationships that exist today? It could use the platforms these giants have created to break down the sequence and focus on the parts they truly dominate in, disrupting the very tenants that have formed the backbone of this industry for decades. The worrying situation here, therefore, would mean the traditional product manufacturer is further removed again from creating and maintaining customer and brand loyalty. We simply disappear into a land of brand unknowns. The only thing I would add to your list would be there are two customers here – our customers and our shareholders -- and we have a clear obligation to both. I think they could be here anytime they want; however, like you, I don’t believe it will be anytime soon. In my view, they will only enter when our margins are good enough or theirs are bad enough. Just don’t rule out the partnerships or consortiums on the personal lines side. It will be a harder debate in the complex commercial world. Disruption is coming!