Amazon is to enter the UK insurance market in an attempt to challenge the big four price comparison sites and succeed where its rival Google failed.
Amazon Insurance Store will enable customers to search for home insurance products from only three providers initially. “This initial launch is just the beginning,” said Jonathan Feifs, Amazon’s general manager of European payment products. “Certainly, there are opportunities to improve other insurance shopping experiences as well.”
The biggest UK sites – Moneysupermarket, Go Compare, Comparethemarket and Confused.com – each have more than 100 insurers signed up for customers to make deal comparisons.
Amazon already offers a range of financial products – from credit and gift cards to Amazon Pay and a “buy now, pay later” service with Barclays UK – but a move into online price comparison services has proved difficult, even for the Silicon Valley companies.
Alphabet’s attempt, Google Compare, which compared credit cards, mortgages and car insurance, was shut down in 2016.
Amazon is launching with the providers Ageas, Co-op and LV= and says it aims to simplify tedious form-filling, slimming down the process to get a quote to “essential questions” only.
“Finding the right home insurance policy can be a time-consuming and confusing task, with quotes that often leave out essential coverage in order to lead with the lowest price,” Feifs said.
The price comparison market is in good health, driven by consumers looking for bargains as the cost of living crisis stretches their budgets.
On Tuesday, shares in Moneysupermarket soared by 7.5% after the company reported a 15% increase in revenue to £102m year on year in the third quarter.
However, the sector operates on slim margins – something Amazon is used to – which has increased sales and consolidation in the UK market.
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In 2020 the magazine publisher Future struck a £594m deal to buy GoCompare. The Silver Lake-owned ZPG, which owns Uswitch and the property site Zoopla, acquired Confused.com from Admiral Group for £508m.
“Google has tried and failed before in this market via its tool Google Compare,” said Jessica Pok, an analyst at Peel Hunt. “We believe Amazon will be a major threat if it earnestly invests and focuses its efforts in this market. For Amazon, not only does it already reach the majority of UK households but it has an abundance of first-party customer data that it can use for targeting.”