Europe's insurers tumble on report Amazon eyeing home insurance move
The STOXX 600 insurance sector index .SXIP hit a session low after a report in The Information, citing an unnamed source, said Amazon.com had contemplated offering home insurance as an offshoot of its home connectivity business
European insurance stocks tumbled on Wednesday as traders reacted to a report U.S. Internet giant Amazon is considering further extending its empire to offer home insurance.
The STOXX 600 insurance sector index .SXIP hit a session low after a report in The Information, citing an unnamed source, said Amazon.com had contemplated offering home insurance as an offshoot of its home connectivity business.
mazon.com Inc., the e-commerce behemoth, is reportedly considering whether to offer home insurance. The Seattle-based company, which has shaken up industries from booksellers to grocers to shoe stores, tends to incite fear among would-be rivals. Yet while the report was a timely topic at the S&P Global Ratings insurance conference Wednesday, analysts said there’s no reason to panic.
If Amazon does offer home insurance, it would probably start small with “simple, bare-bones” coverage, Joshua Shanker, a Deutsche Bank AG analyst, said at the conference. And he questioned whether the e-tailer would even take such a step. “Does Amazon really want to get regulated? I don’t think they do.”
The market could be a lucrative one to disrupt. Insurers in the U.S. and Canada generated $92 billion of premium revenue from homeowners policies last year, according todata from the National Association of Insurance Commissioners.
Cracking the market won’t be easy, however. Analysts pointed to defenses including a maze of regulation and customer loyalty. And Meyer Shields, an analyst at Keefe Bruyette & Woods, said that established insurers hold troves of data that can be a competitive advantage because the industry relies that information for its models.