Source reveals tech giant is in process of building a panel of brokers but Amazon remains silent as research shows a third of people would buy insurance from ‘BigTech’ firms.
UK insurers are working with Amazon ahead of the technology company’s potential entry into the general insurance sector, Insurance Age can reveal.
A market source stated that Amazon is also in the process of building a panel of brokers.
Insurance Age believes the project has been running at least since the first quarter of this year.
Amazon continued to stonewall saying the business “would not comment on rumor or speculation”.
Disruption
The tech giant, an owner of Amazon Alexa which answers all your questions, has a history of not commenting on its insurance plans.
It remained silent in November last year when data and analytics specialist GlobalData released a statement saying that Amazon was recruiting insurance professionals in London to join a new team “looking to disrupt the insurance market in the UK, Germany, France, Italy, and Spain”.
The tech giant’s advertisement for a product manager to look after EU product insurance could be found on job site LinkedIn. The advert revealed the company’s intention to re-define and disrupt traditional insurance models.
Experts have previously agreed that Amazon could be a threat to the UK market. One view was that it might follow the lead of Chinese retailer Alibaba which set up its own online insurance company Zhong An.
Customers
The latest news came as a report by Capgemini and Efma revealed that almost 30% of customers globally would be willing to buy their insurance from a ‘BigTech’ firm such as Amazon or Google.
A statement noted: “Globally, 29.5% of customers said they would consider buying at least one insurance product from a BigTech firm, which is a 12-percentage point increase from 2015 when only 17.5% of customers indicated a willingness to purchase insurance from BigTech firms.”
The report includes Google, Amazon, Facebook, Apple, and Alibaba under its ‘BigTech’ umbrella.
It noted that the large, multinational technology organizations that represent BigTech are taking “slow, deliberate steps towards establishing a presence in the insurance industry by leveraging their strong reputation for superior customer experience”.
Threat
Anirban Bose, global head of financial services and member of the group executive board at Capgemini, said: “The use of data and being able to offer a truly digital customer experience are both critical for the insurer of the future, something BigTech firms like Amazon and Google excel at.
“The threat from such entrants is more real than the insurance industry might want to admit.”
He added: “Insurers, risk assessors by nature, must urgently turn their gaze inwards and consider the competitive risks within their own industry in order to evolve and survive.”
The report findings detailed that to succeed in the digital era insurance firms must foster digital agility and develop operating models to deliver a superior customer experience, bringing together the best of digital and traditional channels.
For example, more than 65% of surveyed respondents said end-to-end personalization of the customer journey was their highest need.
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