Amazon India Plans To Become An Insurance Agent
Amazon.com Inc. plans to sell insurance in India as the world’s largest online retailer looks to join local rivals in strengthening financial services offerings.
Amazon India wants to start by selling life, health and general insurance, according to its filings with the Registrar of Companies. The Seattle-based giant said it aims to carry out the business of soliciting, procuring and servicing insurance as a corporate agent.
India’s insurance industry is expected to be worth $280 billion by 2020, according to estimates by an Assocham-APAS report. Walmart-backed Flipkart has sought approval from the regulator to sell life and general insurance covers. SoftBank and Alibaba-backed Paytm already has a corporate agency licence.
The retailer is entering a market that will only expand, said Yashish Dahiya, co-founder and chief executive officer of insurance aggregator PolicyBazaar that sells 3,00,000 new plans and renewals a month. “It’s good that some of the large technology players with capital are looking to enter,” he said, adding that would popularise insurance and help the industry turn digital much faster.
Amazon has yet to seek an approval from the Insurance Regulatory and Development Authority, a person in the know told BloombergQuint requesting anonymity. A company spokesperson, in an emailed response, however, confirmed the plan, saying Amazon Pay is looking to “serve the needs of customers around insurance. Stay tuned in”.
Overall insurance penetration in the country touched 3.7 percent in 2017 from 2.71 percent in 2001, according to the Assocham-APAS study. Private companies contribute close to 48 percent share in general insurance.
It’s the only way forward as Amazon looks to expand in the financial services sector, said Satish Meena, a New-Delhi based research analyst at Forrester Research. “It already has a large customer base and trust. To capture the financial services market, insurance is the first thing to do.”
The retailer already offers payments services through its Amazon Pay app. Over the past two years, it has been aggressively building the business. Most recently, according to a PTI report, its payments arm acquired Bengaluru-based app aggregator Tapzo. Earlier this year, Amazon invested $22 million in digital lending firm Capital Float and led a $12-million investment in digital insurance startup Acko.