Big technology players to keep insurance industry ‘on toes’ in 2024

Large technology brands are likely to keep the insurance industry “on its toes” through 2024.

That was according to Matt Carter, speciality markets director of Altus Consulting, who told Insurance Times that technology giants could increase their offerings assuming the embedded insurance sector will ”increasingly dominate as a route to market”.

Embedded insurance is a way for firms to include insurance policies as an add-on as part of a digital sale.

Carter felt companies like Amazon, Tesla, Google, Apple, Microsoft, Meta and Nvidia were contributing to a rise of embedding protection products into the buyer’s journey.

“Whilst stand-alone product volumes remain low, assuming the embedded insurance sector will increasingly dominate as a route to market, these companies will not let a rounding error correction prevent them from increasing their insurance offering and presence,” he added.

”This is not bad news for the insurance industry, it just keeps everybody on their toes.”

Stocks

Despite this, deVere Group highlighted that these firm’s technology stocks ”had a notable downturn in fortunes at the start of 2024”.

For example, according to Yahoo Finance, Amazon’s stocks dropped by 1.97% at closing on 4 January 2024, while Google’s fell by 1.10% in the same period.

However, from deVere Group’s Nigel Green said that “only the foolish” would write them off for the rest of the year.

”The recent slip in these tech stocks is prompting investors and analysts to question the sustainability of their impressive 2023 rally,” he said.

“But while uncertainties remain, and there are compelling reasons to believe that these stocks may not surpass the highs of last year, we expect them to continue to perform well, captivating global investors’ attention in 2024.”

And Henry Heathfield, equity analyst at Morningstar told Insurance Times that he did not expect “much of an impact on insurance as a result of these share price declines”.

In the case of Amazon, he explained that ”the only potential impact would be the confidence of vendors in using the business as a platform, subsequently impacting insurance sales”.

However, he added: ”On the cloud, data, and analytics side, the usefulness of that offering is not tied to the underlying company’s share price.

“Some cloud-based services are probably a necessity for most insurers going forward.”