Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) has received a suggestion from Citi financial analyst Todd Bault via a note on Tuesday. Bault and his team noted a real opportunity for Alphabet and the investment bank AIG. They suggest the Internet giant should buy AIG, and turn it into an insurance FinTech lab.
Alphabet could lead innovation in insurance
“There would be great benefits to all parties, investors, the insurance industry, and society itself by making insurance a better product,” Bault noted.
Citi acknowledges that the idea is “audacious,” but it is not wrong. AIG is an American insurance giant, and perhaps is best known for its central role in the 2008 financial crisis. AIG pumped out huge amounts of credit default swaps, which eventually ended up with the firm requiring a $180bn (£125bn) bailout from the government.
In the Q4 of 2008, AIG reported its largest ever loss in corporate history – a record $61.7bn (£42.9bn). Anyone can get a clear idea of how things have been going at AIG since then by giving a look to the share price graph from 2008 up to present day.
So an important question arises here is why exactly Citi think Alphabet Inc (NASDAQ:GOOGL) should buy AIG. In simple language, the Citi said “We believe a tech firm needs to control the technological development and strategy of a major insurer in order to move insurance forward.” There is a strong need for innovation in the insurance industry, and many venture capitalists believe it could be the next frontier of fintech.
Shutting App Store for education
To push Android tablets into the schools, Google (now Alphabet Inc (NASDAQ:GOOGL)) created and launched a version of the Play Store that was tailored for education, a little over two years ago. No news about it has been heard since then, but now the firm has revealed plans to shut down the store.
Speaking to TechCrunch, the firm said it will stop selling Google Play for Education licenses in about a month, suggesting it won’t be possible any longer for the schools to buy and distribute apps in bulk to their students. However, Alphabet will continue to support the tablets that are already using Play for education apps.
Play for Education was a clear failure, but was not a bad news entirely. At the time of its launch, the firm was hoping to promote the use of Android tablets for education with its help. Though no dramatic improvements have been seen in Android tablets for students in that time, Chromebooks have taken a major role in schools.