Internet shopping monolith Amazon may be looking to enter and disrupt the European insurance market, says global analytics firm GlobalData. The company reports that Amazon has been recruiting insurance professionals in London, with eyes on the UK, German, Italian and Spanish insurance markets.
Patricia Davies, financial services analyst at GlobalData, asserted that the level of trust that Amazon has with consumers is something that the insurance industry could benefit from, ‘especially after the likes of the PPI scandal’. GlobalData points towards Amazon’s ‘transparent services’ – such as its ability to track a package, next day delivery, a clear returns policy and customer reviews on products – as reasons why many customers trust the online shopping hub.
“The company is in a good position having established itself as a key service provider for households with it’s 'Prime' service, as well as offering a TV channel and movie service,” Davies continued. “We are already seeing a number of new propositions moving away from annual renewal to a monthly subscription basis, which would fit well with Amazon’s current business model.’’
Amazon has also invested heavily in internet-of-things technology, with its Amazon Echo and Dot voice-activated artificial intelligence products. GlobalData says tech in the home will ‘soon define the insurance requirements of an individual household’ and that these technologies position Amazon in a strong position.
Davies added: ‘‘If insurers are not careful they may be pushed out of having a direct relationship with customers and will be relegated to the role of a price-driven risk carrier at the back end. Either way this is a sure sign disruption is on the way for the UK insurance market.’’