Five insurance sales lessons from Amazon

What can Insurers learn from Amazon?

By Martin Stewart : 12th of September 2019

According to the World Insurance Report, almost 30% of consumers would be willing to buy insurance from tech giants like Amazon and Google. If that’s not alarming you yet, consider this: this figure has almost doubled since 2015. It’s clear proof that technology companies represent a growing threat to insurance sales for traditional companies, should they choose to move into the market.

From our perspective there are several reasons why these technology companies are well-positioned to enter the insurance market. These include:

While its true we haven’t seen any indication that these technology companies are planning on launching insurance products, it’s likely only a matter of time. Some have already entered financial services; Facebook has recently announced that they are introducing a cryptocurrency.

So what lessons can insurers take from the global tech giants to help stay ahead of the curve? We take a close look at Amazon and highlight five things insurers could learn and look to apply to their businesses.

1. Selling direct is efficient

Amazon keeps overheads down by providing an online sales portal instead of costly bricks-and-mortar storefronts. They also reduce their end-to-end costs by controlling the production and distribution process for the goods they offer. Vertical integration allows them to reduce their selling and distribution costs and makes it harder for traditional retailers to compete.

While traditional insurers also make their own products, they often use third parties like brokers or agents to sell them. This creates an additional layer of overheads and limits access to the end consumer.

Some digital insurers have already bypassed intermediaries, allowing them to keep their overheads low. This also opens up opportunities for them to build deeper relationships with their customers.

Try: Adding digital functionality to your website that encourages direct customer contact. This could include giving customers the ability to complete online applications and receive free quotes via your website or app. Or, you could introduce a live chat function that encourages customers to bring their queries straight to you. You’ll cut out the middleman and learn more about your customers with every interaction.

2. Be willing to experiment with insurance sales

Experimentation is imperative for any business that wants to stay competitive in this day and age. Amazon rolls out changes to its products and services almost every day, all of which are tested before being put into action. Amazon has said that only one-third of these experiments are successful. But, in Jeff Bezos’ own words, “If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table”.

This type of experimentation can be challenging for many insurers bound by legacy systems with inflexible core processing capabilities. Hardcoded functionality can limit their ability to trial changes and adapt quickly.

Try: Introducing a culture of experimentation into your organisation by getting customer-facing staff or even customers involved in conceptualising new products or service changes. Get customer feedback early so that you can tweak products before they’re bedded in. Look at ways to experiment with existing products and services, whether you’re tapping into unexplored markets or conducting A/B testing for website changes, testing out small changes can pave the way for new opportunities.

3. Diversify your offering

Amazon may have started as an online bookseller, but today they sell everything from streaming services to groceries. They’ve also partnered with a multitude of small vendors to offer a broader range of goods and services. These partnerships add to Amazon’s bottom line as well as offering consumers an end-to-end shopping experience on a single platform.

Using big data and analytics, Amazon can also pre-empt their customers’ needs based on their browsing history so that they can up-sell and cross-promote wherever possible.

By contrast, many insurers have traditionally sold their own products, and often only through third-party vendors like brokers or agents. This limits their access to data and ability to increase revenue and means customers need to go to multiple vendors to meet their needs.

Try: Partnering with platforms or other products to provide an end to end customer experience. You could integrate with existing platforms, like Liberty Mutual’s partnership with Google Nest. This means that could offering insurance as an additional service to customers of other products and create a new distribution channel. A more challenging, but possibly more profitable option, is to develop your own ecosystem where you bring together services from different vendors that complement your insurance products.

4. Put customers first

Amazon believes in ‘True Customer Obsession’. In the most recent Amazon Annual Report, Jeff Bezos describes this philosophy:

“There are many ways to centre a business. You can be competitor focused, you can be product-focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most important. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.”

Amazon achieves this in a number of ways, including:

Insurers offer their customer peace of mind. To build this, it’s imperative to offer a timely, high-quality customer experience every time a customer interacts with your business.

Try: Incorporating data capture and analytics into your platform so that you can offer a truly personalised user experience. Adding customer reviews is a good way to build trust and influence how people view your business – 85% of customers trust online reviews as much as they do recommendations from friends and family.

5. Think long-term about insurance sales

Amazon first opened its virtual doors in 1994. Back then, the main question Bezos had to field from potential investors was “what’s the internet?”. To be able to see a future where people not only embraced the internet but were willing to use it to buy products was Bezos’ special gift.

If insurers are to keep up with digital disruption, they also need to be able to look into a crystal ball. That means leaving behind the temptation to react to short term problems by bolting on solutions that don’t integrate well. In the long-run, this will slow down your organisation’s ability to adapt and take advantage of opportunities as they arise.

Try: Taking a holistic view of your operations by examining every touchpoint along the value chain for opportunities. Some digital disruptors have already changed the insurance landscape, so look to them for a benchmark on how much you may need to change. A digital agile system that is flexible enough for ongoing adaptation may give you the armour you need to succeed.


Amazon has found success by staying at the cutting edge of technology, always thinking ahead and remaining laser-focused on their customer. To compete, insurers can learn from them and leverage their experience and perspective to disrupt their market.


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