Share this article on:

It's official: Amazon is in the insurance business

The retail giant aims to expand the Amazon Protect offering across Europe, leveraging its unbeatable customer experience. Traditional companies will face with new competitive backgrounds, and here are three reasons for them to get worried
Donatella Cambosu

Last year Amazon.co.uk launched Amazon Protect, a policy against accidental damage, breakdowns, theft of objects (from the washing machine to the mobile phone) purchased through the same e-commerce platform. Made in partnership with The Warranty Group, Amazon Protect offers coverage for two or five years from the delivery of the product, covers incidents and theft, which are not typically covered by the manufacturers, as well as damages to a greater extent than that supplied by the producers. In terms of customer experience, the Amazon Protect purchase flow is integrated directly into the checkout process, so absolutely seamless and “painless” for the customer.

The launch in the UK must have gone quite well, since now it seems that Amazon has started recruiting campaigns in London looking for professionals in the insurance sector in order to strengthen the team that will expand this same service beyond the United Kingdom, in Germany, France, Italy and Spain, countries where it was already operational but only for specific type of assets.

Do traditional companies have to worry? Amazon purchase, in terms of customer experience, is a reference point for all the "digital" customers of any sector.

In an Insurance Business UK article, Patricia Davies, head of insurance at the consulting firm GlobalData, mentioned three reasons why this development should worry traditional companies.

Firstly, Amazon's services are transparent. According to Davies, clear communication - in the form of package tracking, direct return policies and customer reviews - is part of Amazon's positive reputation. A level of transparency that insurance has not yet reached and is the reason why people "love" Amazon.

A GlobalData overall survey found that 18% of consumers would also buy the car and home insurance policies from Amazon. According to GlobalData, this means that the e-commerce company has great potential for cross-selling insurance and is able to gain significant market shares.

Secondly, Amazon, which is increasingly expanding in many sectors, is what Davies describes as a "key service provider" for families, i.e. a "place" where any product and any service is found, and with its "Prime" service gains additional loyalty with a convenient monthly subscription service. On the other hand, insurance carriers are increasingly turning to monthly subscription models, in which Amazon is already a step forward.

Again according to Davies Amazon is more than a step forward in terms of technology and innovation. As described on our website, the new insurance framework, insurtech, is based and driven by technology, and all the companies now make impressive investments to keep up. But keeping up is not enough Amazon, natively digital, is the competitor.

Although British insurers are investing in technology and providing digital services, says Patricia Davies - most of them a step backwards compared to Amazon. "If insurers do not pay attention, being excluded from direct relationships with customers, taking full risk in a price driven market, is a predictable event. As long as Amazon does not decide to take risks ". said Patricia Davies.


30 October 2017

Most viewed

Car insurance, fleets are an opportunity thanks to Smart Mobility

Securing car fleets has never been a good deal for companies. But with the new urban mobility it can become profitable if business models are modified as well. This is according to Roland Berger, a consulting firm that suggests "à la carte" policies Read more >>
Generic placeholder thumbnail

Business

Car insurance, fleets are an opportunity thanks to Smart Mobility

Securing car fleets has never been a good deal for companies. But with the new urban mobility it can become profitable if business models are modified as well. This is according to Roland Berger, a consulting firm that suggests "à la carte" policies

Read more >>

Generic placeholder thumbnail

Business

Cybercrime, what's the price for insurance?

Companies dealing with financial services are those investing most in fighting cybercrime, yet not safe. Accenture Security survey together with Ponemon Institute reports attacks tripled in 5 years

Read more >>