Amazon’s next big product in India could be insurance as it aims to strengthen its financial services offering in the country. According to Bloomberg, Amazon India wants to start by selling life, health and general insurance.
The Seattle-based ecommerce giant has already filed with the Registrar of Companies, detailing its plans. In the filings, it confirms plans to carry out the business of soliciting, procuring and servicing insurance as a corporate agent. The move should not come as a surprise since Walmart-backed Indian ecommerce player, Flipkart, has also sought approval from the regulator to sell life and general insurance covers. Paytm backed by SoftBank and Alibaba also has a corporate agency license to sell insurance covers.
Amazon will definitely not be alone and the space for selling insurance online is only expected to expand further. While Amazon India has filed with the regulator, the company is yet to seek an approval from the Insurance Regulatory and Development Authority. A company spokesperson told Bloomberg via email that Amazon Pay is looking to “serve the needs of customers around insurance.”
According to the Assocham-APAS study, the overall insurance penetration in the country reached 3.7 percent in 2017, up from 2.71 percent in 2001. Bloomberg reports that private companies contribute close to 48 percent of general insurance market. “It’s good that some of the large technology players with capital are looking to enter,” said Yashish Dahiya, co-founder and CEO of PolicyBazaar, an insurance aggregator which sells 3 lakh new plans and renewals a month.
Entering insurance space is seen as logical move for Amazon, which is looking to expand in the financial services sector. “It already has a large customer base and trust. To capture the financial services market, insurance is the first thing to do,” said Satish Meena, a New-Delhi based research analyst at Forrester Research.
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Amazon already supports payments services through its Amazon Pay app and was planning to expand it further to support UPI payments but hit a roadblock due to new regulations. It recently acquired Tapzo, a Bengaluru-based app aggregator and in the coming months, the ecommerce giant will only scale its operations in the financial services segment.