Customer relationships are the key
13 Nov 2017
Amazon is well positioned to disrupt the European insurance market, potentially relegating insurers to “price-driven risk carriers” at the back end, according to data and analytics company GlobalData.
The e-commerce and cloud-computing giant is recruiting insurance professionals in London, with plans to penetrate the British, German, French, Italian and Spanish insurance markets.
GlobalData Financial Services Analyst Patricia Davies says 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.”
According to GlobalData’s latest General Insurance Survey, 18% of consumers would buy motor or home cover from Amazon.
Amazon’s customer-centric, transparent business model provides clear communication throughout the purchasing process, GlobalData says.
“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,” Ms Davies says. “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 recently introduced the Echo voice-activated device that uses artificial intelligence to help people with everyday tasks from scheduling appointments to turning off the lights of their smart homes.
This positions Amazon to meet insurance needs, because home tech will soon define households’ insurance requirements, GlobalData says. Such a close, interactive relationship is a long way from the annual renewal or claims touch-points insurers work to.
“If insurers are not careful they may be pushed out of having a direct relationship with customers.”