It is rumbling in the market: Initial reports indicate that Amazon is setting up its own insurance department in London. Currently, more than 100 insurance experts are to be employed there. In addition, the logistics giant activates resources for finding and hiring these people that many large insurers can only dream of. Not to forget the enormous amount of capital and market power that has made every innovation at Amazon a success, despite all the occasional prophecies of doom. However, this is not the only reason why traditional insurers sleepless nights…
Amazon knows its customers
Amazon knows much more about its customers than any bank or insurer. If you buy books on mountaineering, for example, you will be more open to accident insurance than someone who rarely leaves home. However, it is precisely this person who often experiences that insurance agents want to sell her accident insurance. This is good for Amazon and ultimately also for customers, as it makes it possible to treat them in future much more in line with their needs than has often been the case up to now.
Revolution or water under the bridge?
One can certainly say that successful insurance brokers do exactly that: they know their customers and respond exactly to their needs and situation. However, such intermediaries are only the tip of an iceberg, which as a whole is still not always customer-oriented. In addition, Amazon has invested a lot of time and money to analyse consumer behaviour while the insurance industry has been busy modernising its IT systems.
The compulsion to become better
One can also see the (possible) future positively. When Amazon enters the insurance market, this will put enormous pressure on the industry, the pressure to improve in order to keep up or go under. Perhaps the insurance industry will then rediscover what once made it great: proximity to customers.
This article was first published on LinkedIn.