From clicks to claims: emerging trends and risks of big techs' foray into insurance

FSI Insights  |  No 51  | 
31 August 2023

Big techs have entered the insurance business due to the rapid growth of the digital economy and the increased adoption of technological innovations in the insurance value chain. Big techs' entry into the insurance market can bring benefits but also poses a number of supervisory challenges, similar to those arising from their involvement in other financial sectors.

This paper provides an overview of big techs' involvement in insurance in 14 jurisdictions, analysing their involvement from three main perspectives according to the activity they perform: as risk carriers, intermediaries or service providers. Currently, big techs' regulated insurance activities as risk carriers or insurance intermediaries are limited. Nonetheless, similar to their presence in other financial sectors, big techs have a large footprint in the insurance sector as technology service providers (eg cloud computing).

Due to the potential for big techs to rapidly scale, and the additional risks they entail compared with incumbent players, insurance supervisors should remain vigilant. The insurance activities of big techs are covered under existing insurance regulatory requirements, though none are specific to big techs. As such, from a broader system-wide perspective, big techs' entry into financial services including insurance may require regulatory frameworks, based on suitable international standards, that encompass all these activities and the risks they entail, including those beyond the remit of sectoral regulations.

JEL classification: G18, G22, G28, L41

Keywords: big techs, insurance, innovation, competition, financial stability