Amazon.com Inc. is sounding out some of Europe’s top insurance firms to see if they would contribute products to a UK price comparison website in what would be a major foray by the U.S. online retail giant into the region’s financial services.Three industry executives told Reuters they had held talks with Amazon about the possible launch of a site. One said the talks were part of several discussions Amazon is having with insurers. A second said there were no imminent launch plans.
While it was not immediately clear what type of insurance would be sold on any Amazon site, home and motor policies are popular sellers on existing UK price comparison sites.“As Amazon becomes a larger part of the home, whether its products delivered to the home, security monitoring, home services like Wi-Fi installation, you can make the case that insurance is the next logical step for this company,” said Morning star analyst R.J. Hottovy. The industry sources declined to be named as the talks are confidential. Amazon declined to comment.An Amazon price comparison website for insurance products would be a potential challenge to existing UK sites given the U.S. Company’s cutting-edge technology, reach and loyal customer base.A UK insurance site would also build on Amazon’s existing products in Europe offering extensions to manufacturers’ warranties, a service known as Amazon Protect.
While Amazon’s loyal customer base and reach would probably prove attractive to some insurers happy to cede some of their premiums to Amazon to expand sales, the potential for premiums to be forced lower through competition could deter others.One of the industry sources said the comparison site model fitted Amazon’s strategy of offering a range of products, as opposed to partnering with one firm.It was not immediately clear what financial arrangements Amazon would strike with insurers if it were to go ahead.
In the United States, Amazon has a joint venture with insurer Berkshire Hathaway (BRKa.N) and JP Morgan (JPM.N) aimed at slashing U.S. healthcare costs. It also offers a small business loan program.In Europe, Amazon has had a partnership with The Warranty Group since 2016 to offer the warranty extensions. It also offers co-branded credit cards in the United Kingdom and Germany although it does not lend money of its own.In a sign of potential expansion plans, Amazon began to place job ads last year for staff for a new insurance business in Europe, without giving details.