In the News
Contestable Markets - Amazon launches Amazon Insurance Store
Here is an example of a market where an established, scaled business uses their brand awareness to facilitate entry to a new sector. Amazon is launching a home insurance price comparison service which threatens to be a direct competitor to sites such as Moneysupermarket, Uswitch, Compare the Market and GoCompare.
Starting initially with just three home insurance providers, Amazon will allow customers to compare and purchase buildings and contents insurance from Ageas, Co-op and LV - their revenues will come from taking a cut from each insurance product sold.
This is all part of Amazon's push into personal financial services. As part of the incentives package to attract new customers, Amazon customers who make a qualifying purchase of a home insurance policy through the Amazon Insurance Store will receive a £10 Amazon.co.uk gift card.
Despite achieving $121.2 billion in revenue in the 2nd quarter of 2022 — Amazon also booked a $2 billion loss over the same three months, it will aim to reduce that with new offerings like home and contents insurance. It is a crowded market, but the ability to compare and contrast insurance deals on products from directly within the Amazon web store may prove attractive for price-sensitive consumers.
Britons spent £3.75 billion on home and contents insurance in 2021.