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Hi there,
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.
SoftBank's portfolio starts to collaborate
SoftBank's Masayoshi Son is reportedly encouraging his investments to work together, including cutting favorable deals with each other to grow faster.
In Asia, we are already starting to see early signs of this happening with two recent announcements:
- A forthcoming healthcare-focused joint venture in Southeast Asia between Ping An Good Doctor and Grab.
- 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.
Add-on services make headlines
In the last two weeks, both The Financial Times and The Economist have written about insurers bringing ancillary services to their customers.
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.
As more life insurers ponder ancillary services, other cross-industry changes are also worth monitoring. For one, it's been interesting to watch Best Buy try to transform itself into a provider of health services for the elderly.
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.
Have a great weekend,
Matt
@mlcwong
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Read this to understand Amazon’s existing strategy in financial services — what Amazon has launched and built, where the company is investing, and what recent products tell us about Amazon’s future ambitions.
With Alphabet's new $375M investment, catch up on how the tech-enabled health insurer is hoping to bring change to healthcare with our strategy teardown. Read the analysis (CB Insights platform subscribers).
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This Week in Insurance Tech
A curated mix of recent articles on insurance tech financings, exits, hiring, product launches, partnerships, and perspectives.
Deals
Oscar raises $375M from Alphabet. The health insurer plans to enter the Medicare Advantage market in 2020 and adds Alphabet's Salar Kamangar to its board.
Wired
Pie Insurance raises $11M Series A. The online workers' comp insurance startup for SMBs is currently available in eight states. Greycroft led the round with participation from Aspect Ventures.
Intelligent Insurer
Dais Technology raises $9M. The Chicago-based startup provides a workflow platform for insurance agencies. EMC Insurance is a strategic partner.
CB Insights
Company & Insurer News
Amazon considering UK insurance comparison site. Three industry executives reportedly said they had held talks with Amazon about the possible launch of a site.
Reuters
Travelers takes majority stake in Zensurance. The Toronto-based online commercial insurance startup has signed on over 2,500 businesses and currently works with over 40 insurers. The deal reportedly placed the acquisition price at roughly $16 million CAD.
BetaKit
Ping An Good Doctor partners with Grab. The joint venture plans to give Southeast Asian consumers access to AI-assisted online medical consultations, medicine delivery and appointment bookings in 2019.
South China Morning Post
Ping An Good Doctor to partner with PolicyBazaar. PolicyBazaar's new healthcare business DocPrime is currently in beta stage and is expected to officially launch this month.
Economic Times
Zurich adopts Guidewire Cyence. Zurich has adopted Guidewire Cyence risk analytics to help prospect, underwrite, and price cyber risks.
Insurance Times
Hiscox partners with Eigen Technologies. Hiscox has two pilots underway to use Eigen's natural language processing technology to automate parts of its claims process and quoting process in its London Market business.
Insurance Times
QBE partners with Jupiter Intelligence. The partnership will incorporate Jupiter's weather and climate data analytics for use cases in underwriting and pricing. QBE Ventures also made a strategic investment in the San Mateo-based startup.
Insurance Business
Life insurance with perks. The Economist reports on insurers adding ancillary services including Haven Life's new services offering.
The Economist
Munich Re partners with Embroker. The digital commercial insurance brokerage launched a fully digital directors and officers (D&O) insurance policy designed for VC-backed tech startups with up to $250M in funding through a new partnership with Munich Re Digital Partners.
Insurance Journal
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