Insurance comparison site shares drop on worries of Amazon rivalry

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Insurance comparison site shares drop on worries of Amazon rivalry

The online retail giant has reportedly held talks with insurance firms over a potential comparison site launch.


Amazon is reportedly looking into launching an insurance price comparison site (PA)
Amazon is reportedly looking into launching an insurance price comparison site (PA)

Shares in MoneySupermarket.com and GoCompare.com have fallen amid fears that Amazon is laying the groundwork for its own insurance comparison website.

The online retail giant has reportedly held talks with a number of insurance executives over whether companies would be willing to contribute products to a prospective comparison site of its own, according to Reuters.

While the type of insurance to be sold is not clear, home and motor insurance are popular on existing websites in the UK.

Amazon currently offers warranty extensions in Europe in partnership with The Warranty Group, as well as Amazon-branded credit cards in the UK and Germany.

Expanding into financial services may seem a strange move for a retailer, yet it makes sense when you consider Amazon’s incredible reach and engagement with such a wide range of consumers.
Russ Mould, investment director at AJ Bell

It reportedly posted job adverts for a new insurance business in Europe last year.

The news knocked stocks of potential rivals on Thursday, with shares in MoneySupermarket.com falling around 3.4%.

GoCompare.com fell as much as 10% at the start of trading but was only lower by around 1% by mid-morning.

Amazon said it would not comment on rumours or speculation.

Commenting on the report, Russ Mould, investment director at AJ Bell said: “Expanding into financial services may seem a strange move for a retailer, yet it makes sense when you consider Amazon’s incredible reach and engagement with such a wide range of consumers.

“Home, travel and car insurance are already highly competitive markets from both an underwriting perspective and the number of price comparison sites.

“That won’t bother Amazon as its muscle power and wide reach could give it a fighting chance of making a big success from facilitating the sale of third party insurance policies.

“Other industries linked with a potential move by Amazon include pharmaceuticals and business supplies distribution. And it has already made waves with food delivery and logistics.”

Amazon already runs Amazon Fresh, its nascent delivery business, and last year splashed out more than £10 billion to acquire supermarket chain Whole Foods last year.

The Press Association reported last year that Amazon was weighing up plans for a corporate partnership that could see it begin selling cars to UK consumers on its website after whetting its appetite in European markets including France and Italy.

Mr Mould added: “So what’s next? Can Amazon become an estate agent? Perhaps a more logical move would be to extend into the travel sector, offering discounted holidays, cruises and car rental.”

Amazon UK made headlines earlier this month when earnings showed its corporate tax bill fell by £2.8 million last year despite seeing its pre-tax profits nearly treble to £72.4 million.

But the company only paid £1.7 million in tax after deferring £2.9 million of that total.

Press Association

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