Amazon has announced the launch of an insurance store in the UK, which will be the first of its kind in the world. The online retailer, which started as an online bookstore but has since diversified into all sorts of goods and services, has now made it possible to insure your home by visiting Amazon’s website or app, or by speaking to an Amazon Alexa smart speaker device. Customers can purchase their home and contents insurance through Amazon’s site and receive a discount on their regular premium if they choose to pay monthly instead of annually.
ENGLAND — Through collaborations with three regional insurers, Amazon will begin offering house insurance in the United Kingdom, furthering the e-commerce giant’s drive into the financial services industry.
Amazon Insurance Store is a new service that the business launched on Wednesday.
Customers will be presented with quotations for insurance plans from companies including Ageas, Co-op, and LV+ General Insurance, and Amazon will receive a commission on each policy sold by one of its partners. Offerings from price comparison websites like Comparethemarket and Moneysupermarket are comparable.
Customers who wish to apply for house insurance on Amazon can do so by answering questions about their needs in a questionnaire. Then, along with reviews and star ratings from other customers, they are presented with a selection of estimates from Amazon’s insurance partners. An individual chooses an insurance and then pays for it using Amazon’s own online checkout. The service is now being introduced to a small number of chosen users, but by the end of 2022 it will be accessible to all citizens of the UK.
According to Jonathan Feifs, general manager of Amazon’s European Payment Products, “Finding the correct house insurance policy can be a time-consuming and difficult endeavour, with quotations that frequently leave out vital coverage in order to lead with the lowest price.” “We wanted to enhance the experience for people shopping for house insurance so they could quickly evaluate choices and make a knowledgeable, unbiased decision—just like buying on Amazon.”
Feifs also stated that the launch was “only the beginning,” implying that Amazon would eventually enter additional insurance categories. It’s the first time the business has opened an insurance-selling shop. Products warranty and third-party seller insurance are two of Amazon’s previous insurance offerings.
It is Amazon’s most recent entry into the financial sector. The business already provides lines of credit to retailers that use its platform to sell goods. Additionally, it provides buy now, pay later loans, which let customers pay for products over time in regular payments, both in the U.S. through a collaboration with fintech company Affirm and in the U.K. through a partnership with banking behemoth Barclays. The business introduced insurance for customers in the United Kingdom’s small and medium-sized business market last year.
As we emerge from the epidemic and pressure increases on its conventional operations, Amazon is “revigorating its attempts to further diversify its company,” according to Ben Wood, an analyst at research firm CCS Insight.
Whether this is important to the firm’s entry into house insurance is unknown, but the importance mustn’t be understated as it extends its business in the future, Wood said CNBC. The company “has a plethora of customer data that it can utilise when it delves into other sectors.”
Following the 2020 Covid-19 epidemic, which prevented people from going outside, Amazon experienced a surge in online sales. However, the company’s shares have lost nearly 30% of their value this year due to the impact of rising interest rates on IT companies and investor concerns about a slowdown in e-commerce sales as a result of the cost of living problem. To that, add the fact that Amazon is anticipating a dismal Christmas shopping season, especially in the U.K., where officials have issued a warning about possible wintertime blackouts owing to disruptions in gas supply brought on by the Russia-Ukraine conflict.
Amazon raised the cost of its Prime subscription programme earlier this year in the United States from $119 to $139, underscoring the difficulties caused by supply chain interruptions, labour shortages, and rising inflation. Prime includes quicker delivery times as well as TV and movie streaming. Prime costs increased considerably as sharply in Europe. Higher subscription fees contributed to Amazon’s second quarter revenue growth of 7% to $121.2 billion. Later this month, Amazon is expected to report its third-quarter financial results. The business predicted between 13% and 17% sales increase for the third quarter in July.
Amazon’s entry into the insurance industry comes at a time when “insurtech,” or so-called insurance technology, is experiencing tremendous excitement. Many businesses have received considerable funding from investors on the theory that the insurance industry is in desperate need of digitalization. In spite of the challenging fintech investment environment, Wefox, a German insurtech business, recently secured $400 million in a deal that valued the company at $4.5 billion — or 50% more than its prior funding round.