Verily, an Alphabet subsidiary focused on life sciences, is looking to move into the insurance market, according to a new report.
Sources told CNBC that Verily has been meeting with insurers to discuss partnerships where the two entities would bid jointly on contracts that would require them to take on risk for thousands of patients.
The population health or care management market is already crowded, and to get payers on board Verily would have to come with a pretty strong proposal, the article noted. But tech companies have been more open to taking on risk, as it would allow them to focus on their strong suits—data management, for example—without forming or buying an actual insurance company.
If Verily can work out a deal, the opportunity could be worth between $20 billion and $25 billion in annual spending, with a potential for up to $1 trillion as insurers increasingly eye these risk-based partnerships, Ari Gottlieb, a director at PwC, told CNBC.
A spokesperson for Verily declined to comment on their plans, but the firm has posted job listings for positions that involve managing at-risk patients or have a long-term background in the insurance industry, according to the article.
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Getting into population health would not be Verily's first move into the insurance sphere. The group's subsidiary Onduo, which manages diabetes, joined forces with the Blue Cross Blue Shield Association to offer more personalized diabetes care to BCBS members last year.
The partnership also includes the pharmaceutical company Sanofi, which is one of the co-founders of Onduo.
CNBC's report comes on the heels of another tech giant, Amazon, announcing it would officially enter the healthcare sector. Details remain scant on what exactly Amazon and its partners Berkshire Hathaway and JPMorgan Chase are planning, but insurance companies should be watching the partnership closely.