The tech giant has invested a nine figure sum in the software house but CEO Reid French said brokers should not be concerned about data sharing or disintermediation.
Google owner Alphabet, via its vehicle Capital G, has taken a minority ownership stake in Applied Systems
CEO Reid French revealed at Applied Net 2018 in Nashville that the tech company had teamed up with Google ploughing a “nine figure sum” into the business.
French insisted that the investment would not see Applied sharing customer or broker data with Google.
“It does not allow for any data sharing with Google,” he stated.
He also addressed concerns that Google might be seeking to cut brokers out of the distribution chain.
“Does Google want to disintermediate brokers?
“Remember Applied will only succeed if brokers succeed.”
He asked why would Google invested if they didn’t want brokers to be successful and reiterated that the move is no threat to brokers.
The CEO stated that the deal will see someone from Capital G – Gene Frantz - become an observer on the Applied Systems board.
Frantz commented: “Applied Systems is a pioneer in the insurance industry, transforming the way insurers, agents and customers do business in the cloud.
“We are excited to partner with Applied in support of its rapid growth and best-in-class technology. We look forward to bringing some of the world’s leading experts at Google and Alphabet to drive innovation within the global insurance ecosystem.”
The investment will bring Applied access to Google expertise across artificial intelligence, machine learning, and digital marketing. Other CapitalG investments include Lyft, Airbnb, SurveyMonkey, and Zscaler.
“They have incredible experts in areas like AI and machine learning,” French noted.
“They look for places where people can leverage those skill-sets.”
French also doubled-down on his belief that brokers have a brighter future as the march of technology continues.
He commented: “People say that the long decline [of brokers] has begun. I say that is an interesting story but where is the evidence, where are the figures that support that?”
He stated that better use of tech would enable greater productivity and more positive service.
French also believes that the deal will impact on all Applied customers from the smallest to the largest offering new interaction modes such as gmail and chatbots and mobile claims, for example.
As part of the investment Applied is planning to invest at least $60m in research and development in 2019.
In addition there may be acquisitions in the pipeline – the business also bought benefits partner Dynamis – but he did not single out other software houses as a target.
French commented: “It is a Goldilocks thing.”
He explained that doing too many deals could turn into “a mess” adding: “We want measured M&A.
“Another acquisition over the next year would not surprise me.”
For all the latest industry news direct to your inbox, sign up for our daily newsletter.
- David Ross accused of “not caring” about acting lawfully
- Aston Lark buys Highworth Insurance
- Zurich temporarily pulls out of direct home
- Allianz hires Gerry Ross as head of commercial motor
- Marsh-owner gains approval to buy Jardine Lloyd Thompson
- Arch Insurance International invests in MGA
- First Central Insurance & Technology takes CEO from Hastings