At last month’s Applied Net, 4,000 insurance agents, brokers and insurers gathered to hear about the latest trends and technology developments driving opportunity for their business. One announcement that generated buzz throughout the conference and the industry was the recent minority investment in Applied Systems by CapitalG, the growth equity investment fund of Google parent company Alphabet. Not surprisingly, the announcement spurred excitement and questions, particularly given Google’s previous forays into insurance. Let me use this as an opportunity to reiterate how the independent agent and broker channel stands to benefit from this investment and dispel any misconceptions.
How CapitalG Approaches Its Investments
CapitalG invests in larger, growth-oriented technology companies that have the potential to leverage Google technology, including notable names such as Lyft, Airbnb, SurveyMonkey and Glassdoor. Their investment approach includes providing portfolio companies access to people, knowledge and technology from Google — and parent company Alphabet — to support each company’s growth and strategic plan. Through the investment, Applied Systems will gain Google expertise across artificial intelligence, machine learning and digital marketing, to name just a few areas, which should be extremely helpful to both the company and its customers as we move into the Digital Age of Insurance.
What This Investment Does Not Mean for the Industry
Before partnering with CapitalG, we considered what others might say about Google becoming involved in Applied Systems and, more broadly, the insurance industry as a result of this investment. Let’s get those concerns out of the way. The first question is: Does Google have access to our customer’s data? Simply stated, no. By contract, not a single field of customer or Applied Systems data will be available to Google. None.
The second question is: Should this be seen as Google’s attempt to get into the insurance industry with the hopes of competing with the independent agent and broker? CapitalG invested in Applied Systems because they believe in its mission, which is to revolutionize the business of insurance with cloud-based software. CapitalG believes what we believe: the independent agent and broker is the cornerstone and future of the industry. Given that Applied Systems’s success is directly tied to the success of agents and brokers, CapitalG cannot succeed in their investment if the independent agency channel doesn’t prosper.
What Agents and Brokers Stand to Gain
We believe this minority investment by CapitalG is an opportunity to further advance the technology we deliver to agencies and brokerages, dramatically improving the productivity of your organization to drive higher profitability. Simply put, it allows us to better prepare our customers for the future of the insurance industry.
It’s too early to share specifics, but it’s not too early to discuss how excited we are at Applied Systems for the opportunity to work with Google. We’ve already begun brainstorming sessions internally about which Google technologies would benefit our customers and in what ways. You can imagine the possibilities that artificial intelligence and machine learning can have on our solutions in terms of reducing the amount of data entry required for Applied Epic® or improving the risk management advice presented to clients. To that end, 20 of our top developers are en route to New York later this month to attend Google’s internal machine learning boot camp, which is open to CapitalG companies.
The Digital Age of Insurance
The insurance industry is undergoing significant change. Applied Systems intends to remain at the forefront of digital transformation for the benefit of our customers by taking advantage of opportunities like the investment by CapitalG. We believe the benefits of this investment will flow directly to the independent agents and brokerages who partner with us.
We also believe that this investment serves as a powerful validation of Applied Systems’s people, technology and track record of success. Let me assure you that CapitalG and Google have the opportunity to invest in many market-leading firms. I am so very proud that they selected ours. It is a testament to all of the progress that we have made together, both as a company and as an industry.
In our 35th anniversary year, know that we are proud of our shared history of success. But let me be very clear that as an organization, we spend precious little time looking backward. Instead, we choose to look forward, to the next trends in technology — such as artificial intelligence, micro-services, Big Data and blockchain. With this investment from Google and CapitalG, we are doing just that. If you want to be prepared for the Digital Age of Insurance, there is no better technology partner in the world than Applied Systems.
Thank you for your support, and please do let us know how we can serve you better.
This article originally appeared on the Applied Systems blog.