GlobalData : Amazon, Berkshire Hathaway and JP Morgan healthcare announcement, comment from GlobalData

The announcement on Tuesday 30^th January 2018 that Amazon, Berkshire Hathaway and JPMorgan are investigating ways to make health care more affordable and effective for employees and patients alike is a significant step in the intersection between health, tech and insurance.

Neharika Ralhan Senior Technology Analyst at GlobalData said:

''Amazon, in particular, has a long and successful history of starting small projects that benefit Amazon initially with wider roll out to the masses over time. The most successful example of this being Amazon's cloud computing service that started as an internal data management system that is now a $18bn a year business, accounting for 10 percent of total sales.

Through the redefining of data storage and computing functions accessed via the internet, Amazon Web Services has seen the reconfiguring of corporate ICT departments and the likes of Microsoft playing catch-up.'

The expertise, capital and scale the three organizations have together protect them from heavy regulation and capital requirements- the two key barriers that prevent new comers into the healthcare sphere.'

Healthcare has been in need for all encompassing disruption for some time and the partnership between Amazon, Berkshire Hathaway and JPMorgan is expected to see a flurry of similar collectives start up with the hope to hack the complexities of healthcare and insurance via technology.''

Danielle Cripps, Financial Services Insurance Analyst at GlobalData said:

''This will likely only be the start of the companies' proposition. Its scope could expand to partner with other employers in the US market. This would provide a major competitive threat to other US healthcare providers, which has already been confirmed by their shares dropping in value following the announcement.

Amazon for example may also look overseas. In late 2017, Amazon was recruiting insurance professionals in London to join a new team looking to disrupt the insurance market in the UK, Germany, France, Italy, and Spain. This highlights the global outlook of the online retailer.'

If Amazon establishes itself in the insurance market, it will not be long before other alternative providers follow suit. Apple is already a partner with Vitality in the UK, with the pair receiving press for their offer allowing Vitality customers to receive the newest Apple Watch at a discounted price. Apple has also updated its health app, enabling US customers to see their medical records on their phone. This could signal a potential move into the healthcare space.'

Alternative providers are highly influential brands, have masses of consumer data and resources, and are known for providing exceptional customer experiences - all of which makes them a significant threat to the insurance industry.'

ENDS
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