by senior futurist Richard Worzel, C.F.A.
In June of 2017, I spoke for a major American health insurance company about the future of health care and health insurance. Among the things I discussed was my expectation that the big tech companies would invade both health care and the insurance industry in a big way. Since then, I’ve thought further on these topics, and become even more convinced that these things, and much more, are going to happen.
I’ve chosen to explore these topics using a vignette, a story about the future in which I discuss possible future developments as if they’ve already occurred. I’m basing this vignette on the work I did last June, but have added further details.
In it, I propose Amazon as the tech giant that takes on the task of disrupting both the health care and insurance industries, but it could also be Apple, Google, or a number of other companies – or all of them. I’ve also identified other companies, such as Ancestry.com and CVS, that might work with, or be purchased by, Amazon in my storyline, but I have no inside information that Amazon or any other of the companies mentioned are thinking about doing any of these things. They just struck me as logical extensions of what’s already happening.
Here’s the (fictional) vignette:
How It Began
In 2005, Amazon introduced Amazon Prime, a subscription service that allowed frequent buyers from Amazon’s website to get free, fast shipping. Orders of products by Prime members climbed substantially faster than for non-subscription users of Prime.
In 2011, Amazon added a streaming video service to its subscription.
In 2012, Amazon Prime added a streaming music service.
In 2014, Amazon added a free photo storage service, as well as a Cloud storage system for subscribers.
In 2015, Amazon created its own shopping holiday, Amazon Prime Day, with special discounts for Prime members, as well as free, same-day delivery in some U.S. cities.
By January, 2016, a number of sources reported that half of American households had Prime memberships.
In June of 2017, Amazon invaded the food industry by acquiring Whole Foods – a high-end food retailer with locations in affluent areas of the U.S.
In January, 2019, Amazon announced that it had acquired a significant stake in Intuit, the makers of the popular Turbotax tax preparation software. They also announced that Prime members could pay for their membership directly from their tax refunds. Later that year, they also announced an investment in, and joint venture with, Ancestry.com. This would allow Prime members to explore their family histories for, and to get a reading of, their genetic history using a cheek swab, all included as part of their Prime membership.
In 2020 and 2021, Amazon made investments that caught people off-guard at the time, purchasing control of small, but well-regarded bank, an insurance company, and an investment research & management firm.
Then, in mid-January of 2022, Amazon announced a two-pronged invasion of the health care sector by announcing the Prime LifeCompanion™ for Amazon Prime members.
That changed everything.
The Prime LifeCompanion™
Amazon’s Prime LifeCompanion (“PLC”) initially drew comparisons to Fitbit, Apple’s smartwatch, and its own Alexa-activated range of devices, but turned out to be much more.
It was, indeed, worn on a wrist, and did act as a smart watch, tell the time, offer voice activation, and help people keep track of their workout regimes and general fitness. But that was just the start. PLC turned out to be a platform for much more.
As part of its PLC initiative, Amazon announced an investment in, and joint venture with, CVS pharmacies and their Minute Clinics®. PLC subscribers could go to any designated Minute Clinic with their PLC and get a free, initial health assessment, in cooperation with their own family doctor if they wished. The result was an initial health profile, and, more importantly, Bluetooth-enabled extensions to their PLC device that could monitor specific conditions, depending on their health profile.
Hence, someone with Type II diabetes would get a non-invasive blood sugar monitor that would send blood sugar readings to their PLC 10 times a second. Someone deemed to be at risk for heart disease or stroke might get a small telemetry device that they would stick on their chest, and that would monitor their heart more closely than the PLC’s built-in wristband monitor could.
The result was that each PLC subscriber had an individualized health profile, devices that would monitor specific aspects of their health, plus an Artificial Intelligence (AI) system that would monitor their health from second-to-second. And it connected to the Amazon’s Clinic-in-the-Cloud (“The Clinic”).
By the time Amazon announced PLC, they had almost 120 million Prime subscribers. Their rate of subscription in the U.S. had slowed because having one membership in a household seemed sufficient. But Amazon wanted everyone, not just one member of each household, and The Clinic seemed to be the way to get it. And Amazon made it easier by offering family rates.
But right off the bat, Amazon had a statistical universe of almost 73 million Americans who upgraded to a PLC membership. As the PLC membership was initially offered at a small premium to a normal Prime membership + the cost of the wearable PLC device (amortized over three years), it was easy to sign up.
So, PLC had records of health, genetic data from Ancestry.com, plus such ancillary data as age, geographic region, occupation, and lots of other things that PLC subscribers were urged to offer in order to improve PLC’s ability to anticipate their health needs, as well as seemingly irrelevant data, such as what books, magazine subscriptions, videos, and music they liked, what appliances and electronics they bought, what kinds (and sizes) of clothes they preferred, and much more besides. This was an enormous – and unique – database, and Amazon proceeded to mine it for health patterns, just as they had mined customers’ purchases to uncover new products they might also like to buy.
Finding Gold in the Cloud
As Amazon’s database grew, its Clinic AI started identifying patterns relating to specific conditions, ranging from robust health and longevity, to undetected heart disease, susceptibility to various kinds of cancers, stokes, autoimmune conditions like celiac or Crohn’s disease, as well as likelihood of developing shingles, pneumonia, and various other contagious diseases. This was pure gold, and was a big part of what Amazon had been angling for.
Amazon then turned to the pharmaceutical industry, putting this data up to auction. It didn’t ask for cash up-front for the rights to develop a new drug using the PLC data, but instead demanded a royalty, plus a rock-bottom price for Amazon PLC subscribers who needed the drug in question.
Big pharma fell all over itself in a race to bid for the data – plus The Clinic’s help in projecting precisely who would benefit most, and who would be put at risk, from each new drug.
Over time, this development alone, harnessing the PLC data base plus The Clinic’s AI insights, slashed the price of all new drugs by a factor of 10 – while simultaneously reducing the size of potential markets for any individual drug. But it also made it even more advantageous to be a PLC subscriber as it guaranteed access to the latest and greatest new pharmaceuticals if you needed them, and at a price that couldn’t be matched anywhere else.
PLC to The Clinic and Back Again
Meanwhile, the interactions between each individual’s PLC and The Clinic started to change things as well. Initially, it started with warnings about impending heart attacks, strokes, and other systemic health threats, saving thousands of lives each year. And as the number and detail of subscribers’ health profiles grew, smaller and more subtle symptoms of a wide variety of diseases and conditions were identified by Amazon’s AI. Hence, it was not uncommon for a subscriber to be alerted by her device that she was coming down with the current strain of flu, for instance, or that she should get checked for early stage breast cancer.
And data flowed back from The Clinic to every subscriber’s PLC with new data on what symptoms to watch for, plus regional warnings of new diseases that were emerging, such as new strains of flu. This made PLCs effective in a dynamic way, instead of just using static, historic data.
The data derived from the tens of millions of PLC devices, coupled with the AI processing of all of this data in The Clinic-in-the-Cloud, enabled The Clinic to pick up early signs that no other health organization could identify.
Building on its relationship with Minute Clinics, Amazon negotiated health care agreements with the larger hospital organizations, such as Kaiser Permanente. This meant that subscribers could be notified of an impending health threat by their PLC, have it assessed in more depth at a local Minute Clinic, and then be referred to a full-blown hospital for follow-up diagnosis and treatment if necessary.
As time went on, and as the database grew, and The Clinic’s AI developed a steadily deepening understanding of how the body’s health system worked, The Clinic was able to suggest customized lifestyle changes that would significantly improve wellness over time, decrease the likelihood of disastrous health shocks, and generally increase the happiness of each subscriber. PLC subscriptions became almost universal among anyone who could afford them. And Amazon, of course, reaped the benefits of a steadily growing, recurring revenue stream of immense proportions.
In turn, the growing data and insights allowed Amazon to suggest optimal fitness regimens, and daily diet suggestions. Although the diets initially offered were often seen as ridiculous, or even repulsive, as Amazon’s AI learned a subscriber’s taste preferences, the choices became more palatable and enjoyable, even as they improved nutrition and well-being. And, of course, specialty items could be ordered or purchased through Whole Foods.
Medical studies on the wellness of PLC subscribers compared to non-subscribers showed the superior well-being, and even happiness among PLC subscribers, which Amazon used to great advantage in their marketing materials.
Next Target: Insurance
It didn’t take long for Amazon to take its next step. In 2022, working with CVS and its health insurance partner, Aetna, Amazon combined its knowledge of each individual’s current and likely future health to offer health insurance at a rate that was, generally speaking, much lower than competing health insurance companies could. And where a PLC subscriber was offered a lower premium by a third-party insurer, not involved with Amazon Prime, the eventual claims generally made this a losing proposition for the third-party insurer. They could compete on price, but they didn’t have the data to compete on performance.
From there, it was a short step to offering all health- and life-related insurance. Instead of using an industry-standard actuarial table to calculate life premiums, for instance, Amazon calculated a unique actuarial table for every subscriber, which meant, again, it could offer substantially lower premiums than any conventional life insurer. And, again, when conventional insurers were able to attract PLC subscribers with better rates, those insurers wound up losing money on PLC subscribers as a whole, even though they might make money on a minority of individual contracts.
Then Amazon took a somewhat less predictable step: car, home, and casualty insurance. Based partly on its knowledge of each subscriber’s lifestyle (from the products and services they ordered), and in part from the accelerometer data relayed by the PLC device, Amazon was able to tell how fast a driver drove (or how fast the cars subscribers traveled in as passengers traveled), how many fast starts and stops they made, plus the specific GPS location of the vehicle, and how hazardous that specific route had been for other PLC subscribers in the past. It would also add external data to the mix, such as the time of day, whether it is dark or daylight, what the weather is, how congested the traffic is, what the road conditions are, and whether the car is driving itself, or is being driven by a human. Consequently, Amazon offered the same kind of individualized car insurance rates as they did life insurance. They even offered an even cheaper form of dynamic car insurance, where premiums were paid – and adjusted – monthly, weekly, or even daily, according to how safe the car you drove was. And Amazon provided a free dashboard device to allow you to see how you were performing – and what you could do to reduce your premiums.
Once again, non-participating insurers found it unprofitable insuring PLC subscribers who chose not to buy insurance from Amazon as they were unable to perform the same depth of risk assessment that Amazon did.
Likewise, knowledge of lifestyle and location allowed Amazon to offer reduced-cost home insurance, and rates could be lower still if the subscriber participated in a free home inspection. Not only could such an inspection significantly lower their home insurance premium, but it would also provide the homeowner with a detailed report of how they could improve things like fire resistance and storm susceptibility, lower heating and cooling costs, and generally reduce the costs of running a home while simultaneously improving its safety – and raise its eventual resale value.
And, of course, as Amazon’s experience with tens of millions of subscribers deepened, and its AI grew in sophistication and experience, Amazon Prime membership became more and more valuable – leading to higher subscription rates that were still a bargain to PLC subscribers.
And Then: Banking
Lots of companies had offered credit cards to their customers, so it was no surprise when Amazon made the Amazon Visa card available, with a percentage of each purchase going to reduce the cost of the subscriber’s Prime subscription. It didn’t raise many eyebrows when Amazon started offering interest-bearing checking accounts, certificates of deposit, and interest-bearing investments.
But when Amazon also started making loans at rates substantially lower than commercial banks, that created quite a stir. But, of course, Amazon had been gathering so much information on each of its subscribers for several years by that time that they were able to undercut even the best AI-based lenders, like Zest Lending, Kabbage, or LendUp.
Amazon Financial also moved heavily into the mortgage industry, indirectly becoming a major player in the housing industry. And, again, it could use its knowledge of individual subscribers to help them find and buy houses, or design and specify the home they wanted to build. It could also use Amazon Prime’s enormous buying power to negotiate with a seller, builders, and suppliers for everything that a home might need, starting with floor plans, lumber, nails, and moving all the way up to curtains and bath towels.
Then the Crosshairs Moved to the Investment Industry
The insurance industry and the investment industry have always been close cousins, so it shouldn’t have come as a surprise to anyone when, in 2025, Amazon started offering investment products. It started with Amazon Annuities, offering customized income streams for retired PLC subscribers. Having an individualized actuarial table for every subscriber meant that Amazon could offer the best possible annuity pay-outs for the vast majority of PLC subscribers. And by this time, competitors were wary of trying to offer better rates than Amazon.
And, when Amazon started looking at what they began to call “lifestyle management” in order to customize car and home insurance, they also realized that they could do the same for investments. After all, investment management combines the outlook for markets (interest rates, earnings, and psychology), the outlook for the individual (life expectancy and financial needs), and risk tolerance.
Their earlier acquisition of an investment management firm kick-started their (quantitatively-based) investment research ability. And since, by this time, Amazon knew an awful lot about every one of their subscribers, it wasn’t difficult for them to get their Cloud AI to start projecting each individual’s psychological risk tolerance.
The result integrated with all of the other Amazon capabilities, leading to an integrated view of a person’s future life, help in setting, and achieving financial, health, and personal goals, and providing a real-time dashboard enabling people to see how they well they were progressing in achieving their life goals.
Will It Happen This Way?
So, that’s my vignette – a possible projection of how one tech company might invade and disrupt well-established, and highly lucrative, industries, probably blind-siding them along the way.
I can tell you the reaction I got from my insurance company clients. They thought it was “interesting”, even “fascinating”, but I don’t believe they actually took it seriously, whereas I believe that developments like this are almost inevitable as smart computers, massive data troves, and new ways of assessing old products and services emerge.
I am also very much aware of the things that I did not include in my vignette, especially all the niggly details of many of these advances.
Governments will look, with alarm, at what this kind of tech invasion and disruption of traditional industries. Established companies will lobby furiously for regulation with the actual intention of strangling the tech entrant with red tape since the established companies won’t be able to compete.
And there will be legitimate concerns about anti-trust. When one competitor has a virtually unbeatable advantage, and winds up dominating a market, the temptation to monopolistic behavior will be irresistible.
As well, there will be a massive outcry about the invasions of privacy that something like the Personal LifeCompanion would permit. This could, all on its own, doom such a development if it’s not managed properly. (Think of how Monsanto’s ham-fisted introduction of genetically modified grains led to an enormous backlash against “frankenfoods”, for example.)
And finally, governments will also want access to the data involved, especially as the costs of health care are going to explode as the boomer population ages. The data mining possible, and the AI analysis that would result, could be a complete game-changer in the cost of health care – if it were widely available. Accordingly, I believe governments will require whichever tech companies did things like this to share (i.e., give) its data to governments “for the common good.” Of course, this would also open up an entirely new avenue of privacy invasions, this time by governments and their agents.
The Bottom Line
The bottom line of all this is that this kind of development seems to me to be inevitable – and incredibly contentious. But the potential benefits, for individuals, for their health, for society, and for those companies that survive the shake-out that will come, are so enormous that something like this vignette has to happen in some form or other.
Does this mean Amazon will take over the world? Perhaps – but there are many other organizations that could do the trick as well.
© Copyright, IF Research, February 2018.