Could Amazon enter the insurance business?
While insurers are keeping an eye on the Fintech market to see what impact the recent and planned start-ups may have, there could be a bigger threat from more established names.
China’s vast online marketplace Alibaba has announced a new joint venture with China Taiping Insurance Holdings Co. and five other investors, which will see the e-commerce giant push into the country’s health insurance market.
The venture is launching as Alibaba Health with $154 million of registered capital according to China Daily. China Taiping Insurance is the largest single shareholder.
The move in Asia raises the question of whether Amazon could seek to make a similar move.
A search on Google for “Amazon Insurance”
reveals a page on the US site with a Financial Services section including Auto Insurance and Health Insurance, although there are no products listed. Google itself entered the insurance comparison space last year but closed the Google Compare site earlier this year.
Meanwhile back in the world of start-ups, a new on-demand insurance app called Trov.com is launching in Australia and the UK following a $25 million round of funding. It has partnered with Suncorp in Australia and
AXA in the UK and is planning to expand into North America later.
Reinsurance capital fell in 2015
The level of traditional capital dedicated to reinsurance fell in 2015 according to the latest market report from Willis Re. The total of $357 billion was down 3.5 per cent from the previous year but was offset by an increase in non-traditional capital (up $70 billion) with the total capital dedicated to reinsurance reaching $427 billion.
“Reinsurers continue to face a myriad of headwinds placing downward pressure on underlying results. However, headline figures remain robust and capital positions are strong – the dual saviours of reserve releases and low severity loss experience continue to underpin reported results,” commented Willis Re’s global CEO John Cavanagh.
The report showed that despite softness, many reinsurers achieved premium growth in 2015 but saw lower investment yields due to the low interest rate environment.
Cavanagh says that reinsurers are broadening their business models but “ultimately, reinsurers will yet again be looking to another below average loss year to maintain acceptable results.”
Mercury launches coverage for rideshare drivers
Mercury Insurance is offering coverage for rideshare drivers in Illinois. The firm says that its new product for Uber, Lyft and others, will provide drivers with insurance that will bridge the gap between their personal auto insurance and the coverage provided by their transport network company (TNC).
“Many residents of Illinois enjoy driving for companies like Uber and Lyft as a great way to earn a living or make extra cash because they can set their own hours, be their own bosses and meet new people,” said Jim Reeves, Mercury’s research and development group manager. “Many of them are unknowingly putting themselves and other drivers at risk, however, because they don’t have adequate insurance coverage in the event they get into an accident when their app is on, but they haven’t accepted a ride.”
