Amazon’s home insurance marketplace in the United Kingdom, which launched in October 2022, has recently ceased operations.
The closure of Amazon’s UK insurance storefront made headlines in London’s financial markets on January 25th, with shares of some British property and casualty insurers experiencing gains following Amazon’s confirmation of the closure.
Vassil Gedov, head of Amazon Insurance Store, communicated through Jessica Canfield, Amazon’s spokesperson for international affairs based in Luxembourg, to Insurance Portal. Gedov stated: “Over the past year, we have evaluated various businesses and programs, and as part of this process, we made the tough decision to end the Amazon Insurance Store.”
Gedov reassured that customers who have purchased policies will see no change in their coverage, ongoing claims at the time, or future claims they may file during the term of their policy. Guidance will be provided to customers on steps they should take following this change.
Amazon has previously ventured into the insurance market, including the employee benefits segment with its Amazon Care program in 2019 and launching auto and bike insurance products in India in 2020. In its most recent financial statements released on February 1st, Amazon announced that health care insurance through One Medical is offered to Amazon Prime members for $99 per year, a $100 discount.
Reaction from Partners
Three insurers were part of Amazon’s home insurance offering from the start, with two more added later. Insurance Portal reached out to the initial three insurers for comments on the closure.
Sara Robinson, spokesperson for LV= General Insurance, a subsidiary of Allianz Insurance, stated that Amazon had informed them of its intention to close the Amazon Insurance Store. “They are working with Amazon to ensure that customers are not impacted by this decision and are fully informed. We will continue to work with Amazon to support our existing customers through the transition period of Amazon closing its Insurance Store.”
Maggie Hill, spokesperson for Ageas UK, expressed pride in having worked with a progressive brand like Amazon and launching this new initiative. She understood that Amazon did what was best for its business and is now focusing on supporting customers who purchased Ageas Insurance via the Amazon Insurance Store.
Charles Offord, director general of Co-op Insurance Services, shared through spokesperson David Evans, stated: “We understand Amazon’s decision to discontinue its insurance store in the UK, and we value their collaboration over the last few years. We have a long-standing relationship with Amazon through grocery deliveries and lockers in our stores, and we are always eager to test new ways to serve our members and customers on their platform of choice.”
Offord reassured members and customers who have purchased cooperative insurance policies through Amazon Insurance Store that their coverage or claims would not be affected. “We are pleased with the innovative work we have achieved partnering with Amazon, and we will continue to look for new ways to offer our award-winning insurance to member owners and customers, wherever they choose to shop.”
Seattle-based Amazon.com released its latest financial statements on February 1st, 2024, covering the fourth quarter of 2023 and a provisional 12-month overview. There was no mention of the closure of Amazon Insurance Store in the UK in these statements, presumably to be addressed in the first quarter of 2024 results, as the closure was announced just a few days ago.
However, the preliminary financial statements for 2023 reveal that Amazon’s “international” business segment operated at a loss, albeit reduced from 2022. Amazon’s sales totaled $574.8 billion in 2023, marking a 12% increase from the previous year. The operating income was reported at $36.9 billion, a significant 202% increase compared to 2022.
As of December 31, 2023, Amazon employed 1.54 million people worldwide, including part-time employees, a 1% decrease from the previous year.