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

 

LONDON: 

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.


 

 


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