The Monster Under the Bed

Or the monster crawling from under the bed to snatch your children away and run into its hiding spot in the woods where the children will be eaten.

No, not a fairy tale. Far too many people use Amazon and its potential to enter the insurance industry to eat incumbent insurers’ client base, market share, and profits.

Really ??????

Let’s keep some degree of sanity in play.

If Amazon enters the insurance marketplace, they have to become a carrier (and maintain the requisite licensing and adherence to regulatory requirements) in which case there is another insurance carrier in the insurance marketplace.

Or they have to buy an insurance carrier. But all the business will flow to that insurance carrier. The carrier doesn’t disappear.

Or Amazon might become an insurance broker (and maintain the requisite licensing and adherence to regulatory requirements) in which case there is another insurance broker in the insurance marketplace.

Or Amazon could acquire an insurance broker. But all the business will flow to the broker.

What about cross-sell? What about it … Amazon can only do that where it is approved by insurance regulators.

What about customer service? I’m sure that Amazon is looking forward to the day when it can provide service beyond its FAQ web sites. They are probably counting down the minutes until they have to invest in actual, real human beings to provide service.

And claim service? Yup, Amazon has the analytical chops to analyze instances of potential fraud. I’m beyond sure that Amazon wants to risk its retail sales to the insurance customers they deny claim payment (for lack of the claim being covered by the policy) or because they accuse the customer of committing fraud and take the customer to court. Makes for great customer experience and relations.

Amazon is in the business of selling commodities.

No insurance line of business is a commodity.

There is no monster under the bed.

Insurers should continue to adopt new(er) technology on the pace they believe best because only each insurer intimately knows their resources, their budgetary situation, and their plans.