Reports that Amazon could enter the insurance price comparison market have spooked investors in three UK-listed companies active in this space.
Shares in GoCompare (GOCO), Moneysupermarket (MONY) and Confused.com owner Admiral (ADM) fell hard at the UK market open in response, although their losses have since been pared back.
GoCompare initially slumped by nearly 10% but the losses have since eased to 4.2%. Moneysupermarket trades 3% lower and Admiral has slipped by 1.2%.
Reuters reports that Amazon has been in talks with some of Europe’s leading insurers to see if they would agree to place their products on a new UK price comparison website.
Google has previously dabbled in this space with a car, credit card and mortgage comparison service, but wound it down in 2016.
‘Business bosses around the world increasingly live in fear of Amazon as it seems there is no industry that the tech giant doesn’t want to disrupt,’ says Russ Mould, investment director at AJ Bell.
Amazon isn’t new to the financial services industry as it already runs the Amazon Money Store which features a small selection of credit cards from the likes of Aqua, Provident Financial’s (PFG) Vanquis brand, and Royal Bank of Scotland (RBS).
‘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,’ comments Mould.
‘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.’
