Amazon considering UK insurance comparison site

Firm has held talks with companies about possible launch of website

LOS ANGELES: Amazon.com Inc is sounding out some of Europe’s top insurance firms to see if they would contribute products to a UK price comparison website in what would be a major foray by the US online retail giant into the region’s financial services.

Three industry executives told Reuters they had held talks with Amazon about the possible launch of a site. One said the talks were part of several discussions Amazon is having with insurers. A second said there were no imminent launch plans.

While it was not immediately clear what type of insurance would be sold on any Amazon site, home and motor policies are popular sellers on existing UK price comparison sites.

“As Amazon becomes a larger part of the home, whether it’s products delivered to the home, security monitoring, home services like Wi-Fi installation, you can make the case that insurance is the next logical step for this company,” said Morningstar analyst R.J. Hottovy.

The industry sources declined to be named as the talks are confidential. Amazon declined to comment.

An Amazon price comparison website for insurance products would be a potential challenge to existing UK sites given the US company’s cutting-edge technology, reach and loyal customer base.

A UK insurance site would also build on Amazon’s existing products in Europe offering extensions to manufacturers’ warranties, a service known as Amazon Protect.

One of the industry sources said the com- parison site model fitted Amazon’s strategy of offering a range of products, as opposed to partnering with one firm.

A price comparison website in particular could also be used to help drive traffic to its other marketplaces, Hottovy said.

It was not immediately clear what financial arrangements Amazon would strike with insurers if it were to go ahead.

Tech-rival Google launched a financial services comparison site in UK and the US in 2016 but shut it down after only a year due to low traffic.

In the US, Amazon has a joint venture with insurer Berkshire Hathaway and JP Morgan aimed at slashing US healthcare costs. It also offers a small business loan programme.

In Europe, Amazon has had a partnership with The Warranty Group since 2016 to offer the warranty extensions.

While Chinese tech giants Alibaba and Tencent have large finance arms, leading Western tech firms have taken a more cautious approach to heavily regulated financial services, which often have hefty capital requirements.

A comparison site, however, would let Amazon give its customers access to insurance from a variety of providers while avoiding that level of regulatory burden, industry sources said.

The use of comparison websites to buy motor and home insurance is more prevalent in the UK than Europe or the US.

Some insurers rely heavily on comparison websites for sales.

Separately, Bloomberg reported that Amazon.com Inc is in the running to acquire Landmark Theatres, a move that would vault the e-commerce giant into the brick-and-mortar cinema industry, according to sources.

The company is vying with other suitors to acquire the business from Wagner/Cuban Cos, which is backed by billionaire Mark Cuban and Todd Wagner, according to sources.

The chain’s owners have been working with investment banker Stephens Inc on a possible sale, the sources said. No final decisions have been made, and talks could still fall apart.

Pushing into movie theaters would follow Amazon’s expansion into myriad other forms of media, including a film and TV studio and music service.

With Landmark, it gets a chain focused on independent and foreign films that was founded in 1974.

The company has more than 50 theatres, including high-profile locations in New York, Philadelphia, Chicago, Los Angeles and San Francisco, with about 250 screens in 27 markets.

The e-commerce company already spends billions each year on movies and TV shows, saying it helps entice shoppers to join its Prime subscription plan and makes existing members more likely to renew.

Amazon, founded as a book seller, previously disrupted that industry by giving authors an alternative to the big publishers, eliminating a middleman between readers and artists.

It opened its first brick-and-mortar bookstore in 2015 in Seattle and now has nearly 20 around the country.