Amazon is set to enter the UK insurance market in a bid to challenge the big four comparison shopping sites and succeed where rival Google failed.
Amazon Insurance Store will allow customers to initially search for home insurance products from only three providers. “This initial launch is just the beginning,” said Jonathan Feifs, general manager of Amazon’s European payment products. “Certainly there are opportunities to improve other insurance buying experiences as well.”
The biggest UK sites – Moneysupermarket, Go Compare, Comparethemarket and Confused.com – each have over 100 insurers listed for customers to compare offers.
Amazon already offers a range of financial products – from credit and gift cards to Amazon Pay and a ‘buy now, pay later’ service with Barclays UK – but the switch to online price comparison services has proven difficult, even for companies in Silicon Valley.
Alphabet’s attempt, Google Compare, which compared credit cards, mortgages and car insurance, was shut down in 2016.
Amazon is jumping in with vendors Ageas, Co-op and LV= and says it aims to simplify tedious form-filling, easing the process of getting a quote to “essential questions” only.
“Finding the right home insurance policy can be a confusing and time-consuming task, with quotes often omitting essential coverage in order to offer the lowest price,” Feifs said.
The price comparison market is doing well, driven by consumers looking for bargains as the cost of living crisis strains their budgets.
Shares of Moneysupermarket soared 7.5% on Tuesday after the company reported a 15% increase in revenue to £102m year-on-year in the third quarter.
However, the industry operates on thin margins – something Amazon is used to – which has increased sales and consolidation in the UK market.
In 2020, magazine publisher Future struck a £594m deal to buy GoCompare. ZPG, owned by Silver Lake, which owns Uswitch and property site Zoopla, has acquired Confused.com from Admiral Group for £508m.
“Google has already tried and failed in this market through its Google Compare tool,” said Peel Hunt analyst Jessica Pok. “We believe Amazon will be a major threat if it invests seriously and focuses its efforts in this market. For Amazon, not only does it already reach the majority of UK households, but it has an abundance of first-party customer data which he can use for targeting.
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