Despite the reported "low sales numbers" and concerns the Amazon Insurance dilemma is currently only inferred, and sales is unlikely to be the only metric - far from it!
For Amazon starting small and scaling isn't often an issue, but to an industry that typically operates in scale mode and thinks like a value chain business this might look like abject failure - hence the noise I am seeing. Of course it will be interesting to understand whether they have learnt how to make this work or not, and that's where the real concerns about the reported low numbers comes from, 250 policies sold feels below even PoC levels - if that number is indeed real.
There are a number of factors at play here (and here's three of them):
For it to be attractive to consumers it ultimately needs market breadth not just propositional and experience strength - so "am I getting the best representation of the industry and choice?" is a critical aggregation question for consumers using this approach.
How is this being presented to consumers? Anecdotally they aren't active in search, where the likes of Money-supermarket etc. dominate search terms. And the integration into Amazon isn't there yet, type "insurance" into their search bar and you'll get a list of books. Which asks the question, is all of this deliberate so they can understand exactly how people are looking for insurance and what's the best way for their customers to discover it at the lowest cost of acquisition etc.?
Home insurance is a slower market anyway, with the typical consumer looking to switch c. every 3 years. And learning how to position it as a more considered purchase will be interesting, there's a lot more than a £10 gift voucher to selling something that covers the financial loss of risk in your home, that's for sure.
All things considered, this is a likely to be a typical learn fast experiment for Amazon. They may not even be fully expecting to conduct their shop in this inferred aggregator model any way - famous for "pivots" is this just the entry point for them? Equally, we can also see that they have a lot more ecosystem integration and volume potential that remains untapped, and for me it looks like they are potentially still in "Alpha" mode. Settling the integrations and partners, learning about how to drive the overall experience from capture to customer and beyond.
Famous for "pivots" is this just the entry point for them?
And as per my previous observations in prior published articles, we need to at least take in the approach, and admire the ambition. This business is operating an incredible ecosystem, they offer an ever expanding array of offerings, moving into Healthcare, leading the in-house voice ecosystem and so on.
And we have to ask ourselves as an industry, why is there a continuous emergence of tech enabled and expansive business model proliferation of distribution? How do we best play in this space? What stops us from taking on the same learning journey's in a bid to meet our customer where they are in the way they expect? This still represents an opportunity, and an exciting potential for Amazon to enter a new market and bring an entirely new capability and capacity to a market desperate to get closer to customers. Embedded, risk mitigating, adaptable, human centric in partnership and treating the customer as the channel. Deepening relationships, relevance and expanding revenue sources through new value creation along the way. Sounds a lot like the medicine most insurers need to swallow themselves tbh. Failure is unlikely, what comes of this is unlikely to be a "scaled version of what we see today" so we are all still looking, learning and hoping it's another industry shifting moment of inflection and realisation.
Amazon is one of the most prolific ecosystem driver models out there. They simply maximise their knowledge of the customer to "sell" anything. But they "manufacture" very little. At this stage they aren't becoming an insurer and probably don't see the need to. The gap in the relationship with the customer, their insured life (what ever the underlying underwriting entity) and the world around them is enough. They sell convenience by knowing their customer, being ever present and solving the problems that are in the way of often busy lives where the perception of complexity is high and the maturity of the incumbent market (principally in digital terms) is low.
Wishing ongoing luck to Vassil Gedov, their team and the insurers.
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