Insurance: the net giants are on the lookout

GAFAMs [4] are flexible, act quickly and bet on the future whereas insurers are conservative, act cautiously and envy the capacities of large technological companies to collect data.

Starting out with the initial focus limited to a single domain, GAFAMs have gradually turned to broader activities to increase their scope of operations. Thus, for almost a decade, Amazon, Apple and Google, to name but a few, have been looking for new outlets corresponding to their phenomenal capacity to collect and analyze data gathered from the web. A position that, in today's economy, gives them an unparalleled competitive advantage.

The GAFAMs, which have recently made a name for themselves in the field of financial services with their online payment solutions Apple Pay, Google Pay, Amazon Pay and Facebook Pay, are using their technological know-how to diversify and penetrate markets that they are radically transforming. For example, they are now gradually turning to insurance to offer revolutionary solutions, particularly in the health, motor and homeowner’s insurance sectors.

For the GAFAMs, insurance is a product, "almost" like any other, that can be distributed via the Internet.

The concentration of the digital economy

GAFAMs [6] have succeeded where all companies have failed to date, holding a near-monopoly in their field of activity.

• Google is the most used search engine in the world. It accounts for almost 90% of the solicitations on the internet. In addition, YouTube channel, bought in 2006, is viewed more than a billion times a day, which makes it by far the most followed TV channel in the world,
• Facebook is a social network visited by 2.7 billion users per month,
• Microsoft's computer system operating tools are installed on nearly 88% of computers,
• Amazon has a market share of nearly 50% of e-commerce in the United States. It is the undisputed world leader in this field,
• Apple controls 11.8% of the global smartphone market and 29.2% of the tablet market.

These giant companies have taken advantage of a market that goes far beyond their national borders and extends to the entire earth. Everyone on the planet is a potential customer of GAFAMs. In this context of quasi-monopoly, competition is hardly standing.

Access to the services offered by these technology giants is facilitated by a multitude of easy-to-use connection networks: applications via smartphones and tablets or computers connected to the Internet.

This globalized, easy-to-use distribution network contrasts with that of insurance companies. The latter, due to legislative constraints, have difficulty in developing their brand throughout the world.

Today, the visibility of an insurer across the world cannot be achieved without the use of new technologies. It is currently impossible to get into every corner of the globe as GAFAM and similar companies do.

Led by charismatic leaders, internet giants enjoy a much higher profile than insurers.

As the table below shows, Apple, Amazon, Microsoft, Google and Facebook occupy the top five places in the 2020 ranking, established by Interbrand, while the leading insurer Allianz trails in the 39^th position.

Position of GAFAMs and leading insurers in the "Best Global Brands 2020"

Source : Interbrand