Amazon Eyes UK As Venue for Possible Insurance Comparison Website
Amazon, one of the biggest names in the corporate world, is said to be looking at a few of Europe’s best insurance firms. They are trying to see if these firms are going to contribute some products to a comparison website.
Details of The Talks
Three executives from the industry admitted that Amazon had talked with them regarding a possible launch. According to one source, these talks were just parts of multiple discussions that Amazing was doing with insurers. Another source mentioned that despite these talks, there were still no concrete plans for launch.
Home and motor supplies have always been quite popular in the British insurance market. There hasn’t been any news regarding what type of insurance would be sold, though. According to Morningstar analyst RJ Hottovy, insurance us the next logical step for Amazon.
He states that this is because Amazon us slowly becoming a larger part of the home, whether it’s products being delivered to the home, or other home services like wifi installation ir security monitoring.
When asked regarding this topic, Amazon declined to put forth any comment. However, experts agree that what Amazon may be planning would directly challenge already existing sites in the UK. This is actually a legitimate concern for those insurance products websites, considering Amazon’s reach, loyal customer base, and cutting edge technology.
GoCompare and comparethemarket.com are two examples of the most high profile insurance comparisons websites. The latter showcases products from insurances like Hastings, Axa, and esure while the former lists insurance from firms like LV and Santander
How it Could Happen
Main deterrents for insurance firms wanting to join would be the fact that their premiums would potentially be forced down through competition.
However, experts say that others are sure to be interested due to the giant retailer’s reach and customer base,and that those would also be happy to cede a percentage of their premiums to Amazon to increase sales.
Image Caption: If Amazon were to launch a UK-based insurance website, it would build upon the existing products of Amazon in Europe. These offer manufacturer warranty extension, which is a service known as Amazon Protect.
One of the sources inside the industry even said that the comparison site model fit it with Amazon’s strategy of hosting a wide range of products for their customers, compared to simply siding with a single firm. Hottovy also said that they could also use a price comparison website specifically to boost traffic to their other marketplaces.
Despite all this though, it was still not truly clear what kind of agreement Amazon would have with insurers regarding finances., if it were to strike a deal.
Another big name in business, Google, launched a website that dealt with financial services comparison in both the US and the UK back in 2016. They ultimately shut it down though, because it produced lackluster results in traffic after just one year.
Amazon has already partnered with Warranty Group to offer such warranty extensions since 2016. They also offer joint credit cards in Germany and the UK although it does not lend its own money.
Amazon had started placing their job ads since 2017 as they shared their plan to establish a new insurance business in Europe. However, they reveal any more details about it until today.
Chinese tech giants Tencent and Alibaba have large finance arms, which is different from leading western tech firms that have chosen a more cautious approach in financial services which is heavily regulated. Another thing to consider is that these also come with hefty capital requirements.
The said comparison site would let Amazon offer an access to insurance for its customers.
The customers can then choose from a variety of insurance providers to avoid that level of regulatory burden. They noted how the United Kingdom relies heavily on comparison websites to determine the best motor and home insurance providers to avail than in the United States.
An example for this is the UK insurer Hastings which says around 90% of their motor policies sales came from these comparison sites. According to Amazon’s chief financial officer Geraint Jones, Admiral will also rely on comparison websites to target sales and they welcome such move to join in any Amazon site.
Jones also said that if it establishes a comparison site then he suspects Admiral will be interested in being a member, potentially. According to him, the price comparison remains the main source or basis to distribute their future insurance products and they’re interested to know what they’ll do.
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