So, the great Amazon insurance experiment is over, as the US giant winds down its operations on this strategy. Here is the official statement from their website;
We’ve made the decision to discontinue the Amazon Insurance Store. We will continue to operate the store while we work to define details. This help page will be updated in the coming weeks regarding the next stages, and we encourage you to continue to check back for the latest updates. Rest assured that you will receive ample notice if any action is required by policyholders. In the meantime, see below for additional information that may provide answers to some questions you may have.
Existing Customer Policies
Customers who have purchased policies and kept up with required payments will not see any changes to their coverage, claims in process, or future claims they may make during their policy term.
Contacting Amazon regarding any issues with the Insurance Store
Customers can contact Amazon with questions related to the insurance store here. For any questions regarding claims, the details of your policy coverage, or to cancel or update your home insurance policy, you should continue to reach out directly to your insurer. You can find your insurer’s contact details by visiting the Your Policies page.
COMMENT:
Tech like the Echo and Alexa voice-command systems haven’t been as successful as many tech experts predicted a few years back. Bit like talking to Smartwatches, or shouting at Google to search for stuff rather than using text search boxes. It takes time to transform the habits built up over decades for the majority of us. The complex nature of things like multi-vehicle or Life quotes with pre-existing conditions for example, are not easily compressed into a series of chatbot responses. In the end, you return to a 1990s phone call to an FCA compliant operative to make sure the answers given are accurate, plus T&C s/consumer rights are read out and understood.
Toby McLachlan, MD at Ignite posted on LinkedIn;
“And Amazon is out. That didn’t last long. I promised myself I’d not say ‘I told you so’, but…
…this from my blog on Amazon’s launch in Oct-22: “Amazon insurance will perform badly, way lower than expectations, and if it remains in its current guise it’ll be switched off within 2 years. Amazon likes to move fast. With the partner systems they’ve got and the snails-pace trickle of claims data they’ll get they’re going to get mighty frustrated. They’ll do what Google did with Google Compare in 2016: shrug and move on. It’s such a pity because they had the chance to really change the industry.”
Rory Yates, (above) SVP Corporate Strategy at EIS, sees the Amazon exercise as a big learning opportunity and thinks embedded products can still for them, and insurance brands;
“Leveraging your assets always seems like a sensible way to go. In this case their customers. And whilst we will hear from a lot of commentators that they a. find this a predictable outcome and b. it reflects the complex and competitive nature of insurance, I would largely disagree with them.
“I think this was always a massive learning opportunity. And that always bears fruit in my experience. And my hat is off to all those that participated in this. Creating a “minimum standard” and trying to create a “better experience” were noble efforts. And in other industries both more likely to have succeeded. This therefore perhaps reflects more on the industry and where we are with consumers than it does the platform or approach.
“Price leading purchase habits subsequently required aggregators to validate the best price they could, and to try and do this whilst reflecting the “needs” of the customer. To validate this you need scale and market coverage, otherwise it’s hard to justify “cheapest” or “best value” to a consumer. And it’s therefore impossible to compete in this market model without being price (specifically) competitive, and the data on pricing in this article suggests this was the case. And I suspect market coverage played a part as well.
“My advice is that Amazon should now focus on their embedded insurance potential and focus on markets (e.g. Healthcare) where there is sufficient enough value benefit in creating better experiences and convenience, and where they generally have more leavers to compete best. And I suspect they will do exactly that. For insurers, we need to keep experimenting, taking market opportunities and learning fast from them.”
Maybe one day, in a world where hybrid Teslarati humans are doing much of the hard work for Deliveroo, and one 10 second retina and brain chip scan downloads your entire life history into the jaws of a global data Cloud, Amazon will be back. But then again, perhaps 80% of us will be uninsurable hoverbus passengers anyway?
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