insurtechreview
Home» News

Will the Tech Giants rule over the insurance industry as well?

Insurtech Review | Thursday, August 20, 2026

The big firms are now looking outside of technology in order to grow its operations in all the industries, from the automotive industry to retail to groceries these firms are adopting competitive advantages in the form of data and consumer relationships to mould the market according to them.

The major giants like Apple, Google and Amazon are now eyeing on the insurance policies. For Instance, Amazon is collaborating with JP Morgan and Berkshire Hathaway and adopting a new way towards health insurance, targeting first on the group's employees.

Stay ahead of the industry with exclusive feature stories on the top companies, expert insights and the latest news delivered straight to your inbox. Subscribe today.

On the other side, Amazon is also investing in the retail market by selling product insurance and extended warranties during the sale period and are also investing in insurtech startups. Tesla is planning to introduce an insurance product specific to the Model S. Waymo. Meanwhile Uber and Lyft are having similar conversations internally.

Insurance belongs to a complex, multifaceted and risky business. Here are a few reasons how tech giants will make a place in this industry.

• Direct consumer Relationship

A successful insurance business depends upon distribution. Facebook, Amazon, Apple, Google, Microsoft possess a direct relationship with its consumers and could over a period of time affect the broker business

• Troves of Data

The big secret in insurance is having a detailed information about the needs of our customers. Insurance companies fail at collecting the apt data, on the other hand, these giants have vast data and they know how to leverage analytics and AI to create better products for their customers.  These big firms have data like- location, browsing and advertising data, behavioural data from Smartphone and IoT devices. Combining all these one can create a complete picture of human behaviour their interests and risk profile as well.

• Software engineers and AI

The complexity of insurance tradition is that one has to rely on the past to predict the future and this mammoth data can make it a tiresome and time-consuming job. On the other hand tech giants have thousands of engineers to create fantastic digital customer experience through their modern software and AI.

• Low margins

Average insurance net margins are 3-8 %, and 25-30 % gross margins, which are meagre for tech standards. Software companies average around 80%  gross margins and around 15 % net margins. Even consumer hardware like the iPhone — a costly endeavour by software standards — sees 55-60%  gross margins. Within this, health industry tends to have the highest margins.

• Risk Factor

Low margins also mean that one major event like hurricane, flood or fire can destroy a company's balance sheet for an entire year. Whereas tech companies do not have any historical data so they are more prone to misjudge the risk factors.

• Complex Administration

Most of the insurance companies outsource software to companies like Duck Creek and GuideWire and then customizing the software according to the former's needs thereby spending huge amounts. However, for companies like Amazon, Google and Apple, developing software in-house isn't a big task.

• Apart from Amazon will other tech giants join the lead?

Many firms like Google's sister company- Verily will be jointly bidding for contracts with the insurers. In addition to this, Apple is planning to open a network of medical clinics for its employees.

Health industry would not be the only stop. Tech giants would move to other sectors including home and auto.

• Is East Asia leading?

Opening markets outside the US may be instructive. East Asia has proven to be a good market and has shown a remarkable progress. Alibaba, Baidu, lINE, Rakuten and Baidu are offering their own insurance products. These enterprises verify the identities, enforce trust and can also access behavioural and financial data which are necessary to provide better policies.

Insurance may not be a lucrative business for tech giants in short term but in the long run, tech giants will use their troves of data to compete with their competitors. So, for the time being, we can expect tech giants to form their alliance with the insurance companies wherein both will benefit each other.

Top Auto Tech Startups: ( CruisiO, Power Hero )

More in News

Rapid advancements in AI technologies are driving significant changes in the insurance industry. Like many other sectors, integrating AI into solutions transforms the brokerage landscape, which has typically evolved slowly. This industry urgently requires new approaches to enhance efficiency, prioritize customer needs, and make quicker, more informed decisions. These developments will redefine the entire insurance brokerage industry and create new growth opportunities by delivering more excellent value to customers. Sophisticated underwriting tools rank among the most impacting AI innovation developments in insurance brokerage. This is so because, through an AI-powered algorithm, large volumes of information are rapidly and precisely handled by calculating risk profiles and forecasting the probabilities of claims. Guided by data, the brokers can provide more customized insurance products with price quotes relevant to them to improve both the accuracy of risk assessment and overall customer experiences. In this respect, AI enables brokers to make better and faster decisions and reduces the time and effort involved in underwriting procedures. Customer service is also one of the areas where AI is making immense improvements. Chatbots and virtual assistants, embedded with natural language processing, are crucial abilities for more and more insurance brokerage operations. Such AI-powered applications could handle everything from policy details to claim procedures promptly and with instant response and support. This, in turn, frees the broker to devote more time and energy to higher-value, more complex interactions that can deliver even greater levels of personalized service. AI-powered tools can also parse customer interactions for trends and preferences to help brokers customize their services more intuitively. Claims Processing is one of the most critical parts of insurance brokerage, where AI is now playing its role. This cumbersome and prolonged process usually involves paperwork and manual reviews. AI algorithms can further smooth this process by automating claims and fraud detection assessments and handling documentation. For example, AI can quickly study damaged property images and determine the damage's extent to accelerate the resolution of claims with greater accuracy. Consequently, this speeds up the process and ensures better claim settlement. AI also plays a vital role in improving the predictive analytics capability of insurance brokers. A broker can use machine learning models to study historical data and highlight trends affecting future claims or customer behavior. This predictive insight will trigger proactive action on impending problems, such as recognizing high-risk customers or identifying emerging market trends. So, brokers can make strategic decisions based on such insights for business growth by enhancing risk management. On top of that, AI-driven tools also continuously enhance the efficiency of the administrative processes involved in insurance broker operations. Policy renewals, compliance checks, and data entry jobs can now be automated, which unburdens the administrative workload on the staff and further reduces the possibility of errors. Indeed, not only does this operational efficiency cut costs, but it also serves as a means toward reallocation to more strategic and client-oriented activities. ...Read more

Weekly Brief