Amazon is launching a price comparison portal, Amazon Insurance Store, for UK customers to find home insurance policies. The move has been widely anticipated for some time and could prove a lucrative one as the tech giant continues to expand its financial services offering.
Amazon Insurance Store will be a UK home insurance comparison platform. It will initially feature policies from just three insurers – General Insurance, Ageas UK and Co-op – but Amazon says more will be added in the coming months.
How Amazon Insurance Store will work
The model for Amazon Insurance Store is similar to that of other comparison sites, with the tech giant earning commission from each deal. Customers will be able to leave star ratings for insurers.
“This initial launch is only the beginning,” said Jonathan Feifs, general manager of Amazon’s European payment products., who added that the company will “continue to innovate and make refinements” to the store, with the aim of “providing the most convenient shopping experience possible”.
Amazon says all products sold on the platform will have to comply with a standard of cover it is setting.
“Finding the right home insurance policy can be a time-consuming and confusing task, with quotes that often leave out essential coverage in order to lead with the lowest price,” Feifs added. “When we set out to create the Amazon Insurance Store, we wanted to improve the experience for customers shipping for home insurance so they could easily compare options and make an informed, objective decision.”
It is the latest move by Amazon to carve out a niche in financial services. It already offers product insurance, and last week launched a high-yield savings account with Goldman Sachs, and is running a ‘buy now, pay later’ project in partnership with Barclays Bank.
Can Amazon conquer insurance?
The industry has anticipated this move for a number of years now, says Ben Carey-Evans, senior insurance analyst at Global Data. “Amazon has a presence in many households in the UK via Amazon Alexa, where leading insurers such as Aviva and Zurich have launched ‘skills’ to help customers understand insurance.”
Global Data’s 2021 UK Insurance Consumer Survey found that 19.7% of UK consumers were willing to purchase home insurance from Amazon. “This shows a sizeable proportion of consumers were open to buying insurance through Amazon before it even offered it as a service,” continues Carey-Evans.
The survey found that 29.4% of UK consumers purchase combined household insurance through a price comparison site. “This is also likely to increase amidst the cost of living crisis, as consumers will be more driven by value,” Carey-Evans says. “Therefore, Amazon launching a price comparison site for household insurance makes sense, as it has a reputation for digital expertise and providing value.”
A consumer survey carried out by insurance software company Guidewire shows that more than half of Britons prefer to do their own research, including price comparison websites while shopping for insurance:
Despite the cost of living crisis, home insurance remains a priority for consumers, with 32% of respondents to the Guidewire survey saying it was somewhat unlikely they would cut insurance from their budget, while 21% maintained it was very unlikely.
With demand - and the popularity of comparison sites - likely to remain high, Amazon is well-placed to cash in. "Amazon will immediately be able to target the roughly 30% of consumers who purchase home insurance [through comparison sites],” concludes Carey-Evans. “There is no reason to think it won't become a leading player in this market very quickly.”
Read more: Is the cyber insurance market broken?
