Amazon poised to disrupt UK insurance

Amazon

Amazon is currently recruiting insurance professionals in London to join a new team looking to disrupt the insurance market in the UK, Germany, France, Italy, and Spain, according to GlobalData, a leading data and analytics company.

Amazon offers transparent services such as the ability to track a package, next-day delivery, a clear returns policy, and customer reviews on products, providing clear communication to customers throughout the purchasing journey.

Patricia Davies, Financial Services Analyst at GlobalData, comments, ‘‘Amazon has a positive reputation for putting customers’ needs at the heart of its propositions. This level of trust is something the insurance industry has really struggled with, especially after the likes of the PPI scandal.’’

According to GlobalData’s 2017 General Insurance Survey 18% of consumers would buy their motor or home insurance from Amazon.

Davies, continues, ‘‘The company is in a good position having established itself as a key service provider for households with its “Prime” service, as well as offering a TV channel and movie service. 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.’’

The company’s investment in technology has brought households the Echo and Dot, voice-activated speakers that uses artificial intelligence to support everyday needs. This positions Amazon well for providing insurance needs, as tech in the home will soon define the insurance requirements of an individual household. This close and interactive relationship is a long way from the limited annual renewal or claim process touchpoints insurers currently work to.

Davies adds, ‘‘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.’’