Will Amazon become a major tech insurance company? You would think that the launch this week in the UK of a homeowners insurance comparison site would generate some hype around this issue, similar to what happened with Google Compare a few – mouthful – seven years ago.
However, the insurance industry seems to have taken the news somewhat calmly. In any case, the initial reaction seems to be quiet bewilderment. The BBC even called the launch “careful”. There is no fear that Amazon’s partnership with three insurers will allow it to “redesign” insurance, as it was intended for Google.
This may be because the initial launch is taking place in a country that already has an active market for insurance aggregations that Amazon provides. Google Compare, for example, had been around in the UK for some time before its explosion in the US.
But when considering the differences in response to each, it’s important to remember that we know how the Google Compare story ended: about a year after it launched in the US, the company shut down both iterations of Compare and didn’t take the same aggressive steps to back up with. Auto insurers have also adopted Tesla’s strategy for insuring their cars, as well as the company’s enigmatic but powerful CEO Elon Musk, who called the industry “inefficient.”
At the same time, insurers have settled into what big tech companies claim is their greatest strength: data-driven digital customer experiences. Carriers score well in personal and commercial insurance on this front. The sector’s response to economic headwinds is no different from that of big tech companies.
Continuing the metaphor, the playing field has become level these days thanks to the digital transformation of insurance. In 2015, the word “insurtech” was barely used in the industry, and it didn’t catch on until Compare closed the following year. In hindsight, Compare seems to have served as a catalyst for insurance companies to embrace the digital experience of their industry before anyone else. This leads to weeks like this where the industry can look at a digital experience swatch company coming into their sector and take it in stride.