With Amazon Protect, Amazon has been setting up the groundwork for disrupting the Insurance Market in Europe for the last 3 years
No one can dispute the success of Amazon in Europe as a digital retailer, and many insurers have held it in high esteem as a company to emulate in terms of innovation and overall service proposition. But now Amazon poses a real threat to UK insurers.
Amazon started recruiting insurance professionals in 2017 to join a team set up specifically to disrupt the insurance market in the UK, Germany, France, Italy and Spain.
Amazon Protect offers additional coverage against accidental or manufacturer’s induced damage or theft for select electronic products.
The 3 main things that Amazon Protect covers are:
- Extended warranties
- Accidental damages
- Theft insurance
Amazon Protect was launched in partnership with The Warranty Group’s London General Insurance Company. Amazon Protect offers protection for Amazon purchases ranging from washing machines and mobile phones to kitchen appliances and tablets. Amazon Protect offers protection for two to five years from the delivery of the product.
By simplifying the process of acquiring the insurance and the cancellation process, Amazon Protect makes it easier for the users to make the decision to purchase insurance.
Why do insurance companies have to worry about Amazon Protect?
1. Amazon has a track record with consumers
Amazon has transformed the retail landscape and no one was under the illusion that they could not replicate their success in retail.
- They have enjoyed a positive reputation for putting customers’ needs at the heart of its propositions.
- Amazon offers clear, transparent services such as the ability to track a package, next-day delivery, a clear returns policy and customer reviews on products, providing clear communication to customers throughout the purchasing journey. This level of trust and transparency is something the insurance industry has really struggled with, especially after the likes of the PPI scandal.
- The likelihood that consumers would buy their motor or home insurance from Amazon is very high. This highlights the potential for Amazon to cross-sell into insurance and takes market share from established insurance players.
2. Amazon Prime is popular
Amazon has established itself as a key service provider for households. Its Prime service, promising fast delivery as well as offering a TV channel and movie service, makes for a popular subscription model.
Over the last few years, the number of new propositions moving away from annual renewal to a monthly subscription basis has increased, which would fit well with Amazon’s current business model.
3. Amazon Echo and Dot
In addition, its investment in technology and innovation has brought households the Echo and Dot, voice-activated speakers that use artificial intelligence to support everyday family needs.
Amazon is already leading the way when it comes to the start of the age of smart, connected homes and it is well placed to continue leading the way. This will also position it well for providing insurance needs, as tech in the home will soon define the insurance requirements of an individual household. This close and interactive relationship is a long way from the limited annual renewal or claim process touch points insurers work to.
While European insurers are investing in tech and providing digital services, the majority are light years behind Amazon. If insurers aren’t careful, they may be pushed out of having a direct relationship with customers and be relegated to the role of a price-driven risk carrier at the back-end (assuming Amazon doesn’t want to hold the risk too). Either way, this is a sure sign disruption is on the way for the UK insurance market.
How to sign up for Amazon Protect
- The Amazon Protect option appears when you have a single Amazon Protect ASINs in the order (or if the insurance has been transferred to another person)
- After purchasing an insurance policy for your product, you’ll receive an automated e-mail that includes the details of your insurance and an official confirmation of purchase.
- Alternatively, you can also view your policy documents in Your Account, by visiting Your Orders, locating the applicable order, and clicking View Policy Documents.