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Industry convergence: consumers are willing to buy insurance from Amazon or Google

Posting in Technology

The online economy has given rise to a lot of industry convergence. We subscribe to television services through telephone companies. We make telephone calls through cable TV providers. We buy books from the same place we rent computer services.

This convergence is spreading to other industries outside the tech realm as well. An Accenture study, for example, finds insurance may be a product area up from grabs, by providers far outside the traditional insurance industry.

The consultancy found that two-thirds (67 percent) of the 6,000 insurance customers it spoke to would consider purchasing insurance products from organizations other than insurers. One out of four, for example, would consider buying from online service providers such as Google and Amazon.

Forty-three percent of respondents also said they would consider buying insurance from banks, almost one-quarter (23 percent) from online service providers, 20 percent from home service providers, such as telecommunication or home security companies, 14 percent from retailers and 12 percent from car dealers.

Of course, the notion of services being provided outside their traditional industries has been explored before. In the early 1980s, when Sears was the largest retailer, it experimented with offering financial services out of its locations. In the 1990s, there was speculation that the largest IT companies at that time would take over the roles of banks, with online offerings such as Microsoft Money and Intuit Quicken. The threats of such severe disruption prompted banks and  financial services firms to build their Internet presences, as well as sharpen their customer service. 

While it's uncertain how deeply Amazon or Google would insert themselves into the heavily regulated insurance space, the study is a wake-up call to carriers to ramp up their online presences and customer service. The Accenture report even observes that one insurance carrier, USAA, is getting deeper into the business of actually selling cars.

So we'll soon be buying insurance from car dealers and cars from insurance carriers. Welcome to the age of convergence.

(Thumbnail photo: CNET.)

— By on February 10, 2014, 3:42 PM PST

Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure