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The Actuary The magazine of the Institute & Faculty of Actuaries

Technology giants could look to disrupt global healthcare market

Amazon, Berkshire Hathaway and JPMorgan Chase & Co have teamed up to create a new healthcare company, causing the share value of major US health and insurance firms to plummet.

Amazon could "look overseas" ©Shutterstock
Amazon could "look overseas" ©Shutterstock

The new not-for-profit company aims to harness the power of technology in order to provide employees with simplified, high-quality and transparent healthcare at a reasonable cost.

This has fuelled speculation that Amazon could also attempt to enter foreign markets, capitalising on its vast resources, consumer data, and reputation for excellent customer service.

“Amazon may also look overseas,” GlobalData insurance analyst, Danielle Cripps, said.

“In late 2017, Amazon was recruiting insurance professionals in London to join a new team looking to disrupt the insurance market in the UK, Germany, France, Italy, and Spain.

“This highlights the global outlook of the online retailer.”

Berkshire Hathaway is the third-largest public company globally, as well as an insurance provider, while JP Morgan is the biggest bank in the US, and Amazon the largest internet retailer in the world.

In a joint statement released yesterday, the three companies said they would bring their scale and complementary expertise to the healthcare initiative in order to tackle one of the “greatest issues facing society today”.

Although there was no mention of entering foreign markets, Cripps went on to highlight how other highly influential brands like Apple may have already made small steps into healthcare abroad.

She explained how the technology firm is already a partner with Vitality in the UK, providing discount smart watches for customers of the health and life insurance provider.

The company has taken this further in the US, with its latest mobile operating system set to allow patients to view electronic medical records on their phones, with 12 hospitals already signed up to test the software.

“This could signal a potential move into the healthcare space,” Cripps continued.

“Alternative providers have masses of consumer data and resources, and are known for providing exceptional customer experiences – all of which makes them a significant threat.”

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