life insurers look to services. Travelers acquires Canadian startup. This week in insurance tech.
Reuters reported this week that Amazon is exploring the possibility of launching an insurance comparison site in the UK. Let’s unpack this across a couple dimensions:
1) What would this mean for existing comparison sites in the UK?
Let’s look first at auto. In the UK, churn rates of auto insurers are north of 40% and ~70% of these switches are done using a price comparison site. But auto insurance is also the most mature segment of UK price comparison, and recent pricing declines have led to a more challenging environment.
Home insurance could be more promising to enter, with premiums up 7% YoY in Q2’18 according to comparison site Moneysupermarket.
Amazon’s entrance would come amid other new challenges for comparison sites. Experian’s acquisition of free credit score app ClearScore is step in the direction of bringing Credit Karma‘s financial aggregator model to the UK. And Silver Lake’s $3B acquisition of ZPG, which owns real estate portal Zoopla as well as comparison sites money.co.uk and uSwitch, could also be a sign of future consolidation in insurance comparison.
Some comparison sites are looking to new segments for growth. In July, Moneysupermarket said it planned to launch a new mortgage business called Podium.
Another longer-term factor to monitor for both Amazon’s potential move and existing price comparison sites is the impact of open banking. Open banking was absent in 2016 when Google operated and then shut down its price comparison service – the longer-term impact of open banking could lead to a more fragmented market for comparison services over time
2) How does this compare with other ways Amazon is engaging the insurance industry?
For two years, Amazon has operated product insurance white-label Amazon Protect in partnership with Assurant’s Warranty Group in Europe. In May, it made an investment in Indian online general insurer Acko. Among international markets, Amazon has made India a major priority upping its financial commitment to grow its business in the country to $7B earlier this summer.
Of course, Amazon also continues to hire for roles to grow its AWS business in the insurance industry.
A potential collaboration between Ping An Good Doctor and India’s PolicyBazaar, which is building out its own online healthcare service called DocPrime.
The announcements come a couple weeks after Prudential’s Asia unit partnered with Babylon Health to give its clients access to Babylon’s virtual consultation services in 12 markets. Prudential is reportedly paying ~$100M over several years to access Babylon’s software.
MassMutual’s Haven Life, for example, recently launched a new rider called Plus, which includes benefits like a free online safe deposit box for storing important documents, a discount on at-home health tests, and a free digital will-writing service.
This week, Best Buy made its largest acquisition ever to acquire San Diego-based GreatCall. GreatCall primarily focuses on an emergency response service accessible through different connected devices and wearables. It has over 900,000 subscribers and has annual revenue of about $300M.
The move is part of expanding Best Buy’s Assured Living unit, which aims to sell smart home devices that can be installed and a monthly monitoring service used by seniors’ adult children or caregivers.