Amazon has launched a home insurance comparison service in Britain, bringing it closer to the life insurance and savings market.
The tech giant announced last week that it had already listed three major insurers on its portal – Ageas UK, Co-op and LV=General Insurance, which is part of Allianz.
He hopes to add more early next year.
Ian McKenna – director of the Financial Technology Research Council – warned that this should be an “industry-wide wake-up call”.
“Amazon uses data science to understand customer behavior perhaps better than any other company in the world,” he said. Money Marketing.
“The prospect of them suggesting what people’s preferences might be for, say, an Isa must be disturbing to the entire investment industry. The same must be true for protection counsellors.
The online giant increasingly sees financial services as an attractive market to enter.
In August last year, Amazon invested in Indian fintech startup Smallcase, laying the groundwork for a foray into the wealth management space.
The company had a limited insurance operation in the UK for several years.
It dipped further into the financial services sector in 2020, when it announced plans to offer car and motorcycle insurance in India.
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McKenna believes the wealth management industry needs to be vigilant.
He said: “On a positive note, Amazon has the potential to reach millions of people who are not protecting their families or saving in ways that have never been done before.”
However, he warned that this deal must highlight to advisers why they need a “full digital presence” to ensure they are the “primary choice” for the financial discussion a client wants to have.
“If Amazon offers something based on ‘people like you,’ advisors need to make sure the customer will call them from an objective perspective.”
Lang Cat’s director of public affairs, Tom McPhail, suggested there are reasons why major online platforms have yet to embrace financial services.
“It’s complicated, highly regulated and carries significant reputational risk,” he tweeted. “I guess they all considered the potential benefits and risks and chose to invest elsewhere.”