Closure of Amazon’s UK insurance business ‘not surprising’, say brokers
The closure of Amazon’s insurance business less than two years after its launch has not come as a surprise to brokers.
Amazon Insurance Store, which offered a range of home and contents polices sold through insurers like LV and Co-op, has already closed its doors after it launched back in October 2022.
Charwin Private Clients director, Ranald Mitchell, said the announcement did not come as a shock to him as many other large brands have had similar experiences.
He pointed out that Amazon lasted about the same length of time as the Google Comparison project, an aggregator launched by the search engine in 2012.
“Clearly it wasn’t as successful as planned, and as Amazon has found out, turning the heads and buying habits of the British public is not easy,” Mitchell added.
We saw Tesco and Sainsbury offer mortgages and other services, and scale back and close these downStephen Perkins, Yellow Brick MortgagesRowley Turton director, Scott Gallacher, said the closure showed “how difficult it is to break into new markets”.
“While their brand is a winner in online shopping, the Amazon name carried little weight in the insurance markets, as its exit clearly shows,” he added.
However, Turton acknowledged that any reduction in choice and competition is “generally bad news” for consumers.
Yellow Brick Mortgages managing director, Stephen Perkins, pointed out other large brands have had similar experiences in this area.
“We saw Tesco and Sainsbury offer mortgages and other services, and scale back and close these down”, he said.
“I imagine that, for Amazon, the margins of profit compared to the risks were not stacking up.
“Maybe people were not even aware it was a service they offered, so probably a lack of take up will also be a factor.”
Similar speculation was provided by Release Freedom director and broker, Simon Bridgland, who said: “Tiny profit margins or maybe even losses when compared to their usual trade, or perhaps they didn’t like the regulatory world of financial services in the UK.”
Meanwhile, Mortgageshop.com financial adviser, Gary Bush, offered a positive perspective: “Financial advisers across the UK should stand proud today that they continue to survive amongst all the pressures upon them where the corporates fail.”
tom.dunstan@ft.com
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