What Can InsurTechs Learn From the Amazon Insurance Closure?
Only 15 months after launching, Amazon is closing the Amazon Insurance Store.
“Over the last year, we have been evaluating various businesses and programmes and as a part of that, we’ve made the difficult decision to discontinue the Amazon Insurance Store,” shares Vassil Gedov, General Manager of Financial Services for Amazon EU and Head of the Amazon Insurance Store.
“Customers who have purchased policies will not see any changes to their coverage, claims in process at this time or future claims they may make during their policy term. We will provide guidance to customers on any actions they need to take as a result of this change.”
Opened in October 2022, the vision for Amazon Insurance Store was to provide a new, simple, and convenient way to request and review quotes, select a policy, and then checkout, all via the Amazon site. Whilst the site’s operation was similar to LV, or Co-Op, the allure of using Amazon for insurance seemingly was not enough to keep it central to the company’s financial strategy.
At time of the store’s launch, Jonathan Feifs, then general manager of Amazon’s European Payment Products celebrated the opening:
“Shopping online for home insurance is a well-established experience, and our goal is to exceed customers’ expectations when it comes to the Amazon Insurance Store.”
Insurers need to keep experimenting — and learning, says EIS
"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 find this a predictable outcome and it reflects the complex and competitive nature of insurance, I would largely disagree with them,” says Rory Yates, SVP Corporate Strategy at EIS, about the closure of the Amazon Insurance Store.
"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 are 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.”
Founded in 2008, EIS is a global company headquartered in San Francisco that prides itself on being the first choice for ambitious insurers focused on building innovative customer-centric insurance platforms. The company serves insurers globally in all lines of business, providing a digital insurance platform specifically designed to remove obstacles and provide insurers with the freedom to pursue and achieve important strategic goals.
EIS provides an open, flexible, cloud-native, coretech platform that liberates insurers to increase market share, develop new products, build engaging experiences, lower acquisition costs, boost retention, and deliver greater long-term revenue and profits.
"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,” Yates says.
"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."
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