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The Pandemic Has Boosted Mobile Payments – But There’s Still Potential for Insurers to Tap
In March 2020, the Merriam-Webster Dictionary added contactless to its word list1. They define it as relating to or...
Nov 27, 2018 1:51:00 PM
Considered one of the world’s most innovative companies, Amazon has virtually transformed the way people shop and live. The secret to its success? For starters, Amazon is never completely satisfied with the status quo. In fact, Amazon is continually looking for new opportunities in various sectors and categories in which to evolve and expand. Very recently, the retail giant has expanded its reach to the insurance industry.
In 2016, Amazon launched its own brand of insurance (Amazon Protect) in the United Kingdom, along with various other financial products. With a single click, consumers can add breakdown and accident insurance coverage to their online shopping carts. And while this may not seem like a big leap into the insurance industry, in true Amazon fashion, it’s most likely just the beginning.
In fact, according to a recent Bloomberg report, Amazon was considering a new expansion opportunity to sell insurance products in the Indian market. Even with an $80 billion online presence, Amazon sees India as a wealth of untapped potential, given the country’s young, tech-savvy demographic. Next could be a broader area of Europe, with the retailer said to be actively recruiting London-based insurance professionals to disrupt the insurance market in France, Italy, Spain, and Germany, according to the data solution provider GlobalData.
In a 2017 survey, more than 18% of participants said they would buy auto or home insurance from Amazon, demonstrating the potential for the retailer to cross-sell into the insurance industry. However, at this point, Amazon has yet to disclose any definite plans to sell insurance in the U.S. And while we can’t be certain what type of insurance Amazon may or may not roll out, if and when it does, it has been reported that the retailer may be considering homeowners insurance, due to the growing popularity of smart home devices and soon-to-be-developed home robots. The theory is that if these connected devices and robots can be equipped with cameras and sensors to monitor homes for risks such as smoke, a break-in, carbon monoxide, etc., they may be used to help consumers lower their insurance premiums.
But will consumers be receptive? Possibly. In a recent whitepaper by Parks Associates, nearly 40% of consumers surveyed with home or renter’s insurance indicated that they were interested in buying smart home devices capable of detecting a home electrical fire. Given the developing capabilities of these devices, partnership opportunities with home insurers could be the next step. Presently, a number of property and casualty insurers are already utilizing Amazon’s Alexa voice assistant to help consumers buy insurance.
Another area where the retailer is increasing its presence is health care. Earlier this year, Amazon announced its partnership with JP Morgan and Berkshire Hathaway to discuss technology solutions to address the problem of rising employee health benefits costs. This, coupled with the retailer’s current partnerships with some of the nation’s largest medical supply distributors, may be an early indication that health care insurance could be in its sights.
Although it is uncertain how wide Amazon will cast its net in the insurance industry and just how much of the market share it may take from established insurers, it’s wise to stay informed and be proactive. Many industry experts agree that this potential disruptor should be a catalyst to help you define your business strategies, including identifying where technology fits into your plan — particularly in the area of adopting and maintaining a more consumer-centric digitalization strategy.
At One Inc, we’re helping insurers make the transition to enhance their digital capabilities. Our single platform for processing premiums and claims payments is designed to seamlessly integrate with existing core systems, proactively engaging policyholders in the channels they use the most. Intrigued? Give us a call to learn more.
Additional sources used in this article:CNBC
Chris Piwinski is a Product Marketing Manager at One Inc, focusing on “what’s now” and “what’s next” in insurance technology.
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