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LONDON – Amazon will begin selling home insurance in the UK through partnerships with three local insurers, bolstering the e-commerce titan’s push into financial services.
The company announced on Wednesday the opening of a new service called Amazon Insurance Store.
The product will display buyers’ quotes for policies from insurers including Ageas, Co-op and LV+ General Insurance, with Amazon pocketing a commission on each sale from its partners. It is similar to offers from price comparison sites like Comparethemarket and Moneysupermarket.
Customers who want to purchase home insurance on Amazon can do so by completing a questionnaire, which asks them questions about their home insurance needs. They are then presented with a list of quotes from Amazon’s insurance partners, along with reviews and star ratings from other customers. Once a user decides which policy they want to follow, they pay for it using Amazon’s own online checkout. The service is initially rolling out to a few select customers, but will be available across the UK by the end of 2022.
“Finding the right home insurance policy can be a time-consuming and confusing task, with quotes often omitting essential cover in order to offer the lowest price,” said Jonathan Feifs, Managing Director of European Payments Products at Amazon, in a press. out on Wednesday. “When we decided to create Amazon Insurance Store, we wanted to improve the experience for customers buying home insurance so they could easily compare options and make an informed, objective decision, just like when they buy on Amazon. “
Feifs added that the launch was “just the beginning,” suggesting that Amazon could expand into other insurance categories over time. This is the first time the company has launched a store selling insurance. Previous Amazon insurance products include product warranty and third-party seller insurance.
It marks Amazon’s latest foray into the world of finance. The company already offers lines of credit to merchants selling items on its platform. It also offers buy now, pay later loans – which allow buyers to repay purchases in monthly installments – in the US through a partnership with a fintech company. To affirmand in the UK with the banking giant Barclays. Last year, the company launched insurance for small and medium-sized business customers in the UK.
Ben Wood, an analyst at research firm CCS Insight, said the move shows how Amazon is “re-energizing its efforts to further diversify its business as we emerge from the pandemic and pressure increases on its traditional business.”
The company “has a wealth of consumer data it can use as it ventures into new areas,” Wood told CNBC, adding, “It’s unclear if it’s relevant to this foray. in home insurance, but the value cannot be underestimated as it will expand its business in the future.”
Amazon saw sales on its site skyrocket after the 2020 Covid-19 outbreak, which drove shoppers online as they couldn’t get out. However, the company’s shares have fallen more than 30% this year as rising interest rates hit tech stocks and investor fears of a slowdown in e-commerce sales as the cost of computing slumps. life saps the feeling. Add to that the fact that Amazon is heading into a gloomy holiday shopping season, particularly in the UK, where authorities have warned of power cuts this winter due to the disruption of electricity supplies. gas caused by the Russian-Ukrainian war.
Earlier this year, Amazon raised the price of its Prime subscription service, which offers faster delivery times and TV and movie streaming, to $139 from $119 in the US, pointing out challenges posed by supply chain disruptions, labor constraints and high inflation. Prime prices in Europe have seen even steeper increases. Rising subscription costs helped boost Amazon’s second-quarter revenue, which rose 7% to $121.2 billion. Amazon is expected to release its third quarter numbers later this month. In July, the company forecast third-quarter revenue growth of between 13% and 17%.
Amazon’s entry into the insurance market comes amid heightened hype around so-called insurance technology, or insurtech. A number of startups have secured huge sums from investors claiming that insurance is a market in dire need of digitization. Wefox, a German insurtech company, recently raised $400 million in a round valuing the company at $4.5 billion, for example – 50% more than its previous funding round, despite a climate of uncertainty. gloomy fintech funding.
– CNBC’s Arjun Kharpal contributed to this report