More than 30% of UK consumers would purchase some form of insurance product from alternative providers like Google, Amazon and Facebook, new research has found.
A report from data and analytics firm GlobalData has identified an opening of approximately £9bn in gross written premiums for these firms, potentially causing widespread disruption across the industry.
Vast resources, consumer data, and reputation for excellent customer service are areas where it is thought tech giants could capitalise, with it recently found that Amazon has started recruiting insurance professionals in London.
"Should the likes of Amazon and Google enter the insurance industry, disruption will be widespread, particularly within the home, motor and travel markets," GlobalData financial analyst, Daniel Pearce, said.
"The technological capabilities of these alternative providers far exceed those of current market incumbents, and with consumers open to purchasing an insurance product from them, the demand is also there."
The report reveals that almost one-fifth of UK consumers are open to purchasing home insurance from Google, presenting an opportunity for the company to leverage its smart home devices.
This comes after previous research highlighted how Apple has already made small steps into the market by partnering with Vitality in the UK and providing smart watches for life insurance customers.
In order to overcome the potential threat of alternative providers, the report suggests insurers collaborate with these companies in order to leverage their knowledge of the latest technologies.
However, Pearce said insurers should also be aware of the threat posed by reinsurers, which may be able to bypass primary players after investing heavily in a number of customer-facing insurtechs.
"Over the next two years the threat posed by both alternative providers and reinsurers will likely become a reality," he continued.
"From a consumer perspective, increased competition in the market and the implementation of the latest technologies will only prove to be beneficial, with the potential for lower premiums and increasingly personalised products."
