We all know that Indian insurance market is dominated by companies who do every little bit possible at their end to woo new customers so that they can have a bigger bite on the insurance market pie. In such a situation, a new entrant to the market who wants to offer different types of life insurance policies wouldn’t have taken a toll on the market share of existing companies. However, a well-known, reputed and trusted brand name of Amazon’s stature if making its mind to enter this sector, it might surely give any reputed company out there in the market a good run for its money. This is true as the news is doing the round of the web for a considerable time now and confirms that the e-commerce giant is all set to make inroads into the Indian life insurance sector.
Why the speculation?
Now you might think that the news is merely a by-product of a rumour mill but it is enough to give current life insurance policy selling companies a wakeup call. Well, they say the smoke without a fire is unlikely and the case isn’t different here either. As per a report in one of the leading International newspapers, Amazon’s India unit has reached out to the Ministry of Corporate Affairs to file the required documents with the Registrar of Companies in India. These documents say that Amazon aims to start a business of soliciting, procuring and serving insurance being a corporate agent.
What Amazon aims to sell initially?
Now that the million-dollar question all the companies who are already having a big market share might surely be having is whether e-commerce giant is entering the insurance sector with all the guns blazing or just aiming to target a fraction of it initially with limited life insurance plans. The answer seems to bring a little respite to the companies who have already started sweating for now. Amazon, as per the latest reports available, is starting by selling general, health and life insurance plans, The fact still remains that the kind of reputation and customers’ trust that Amazon enjoys, it will give current market players sleepless nights for sure.
The digital payment arm of Amazon India is to roll out specific products in addition to financial products like loans and EMI services. This move seems in line with the e-commerce giant’s business model, which aims to sell everything a customer needs. How can it now exclude the insurance sector, which might add millions of dollars to its already flourishing empire?
Why isn’t it surprising but a big threat to existing companies
An e-commerce company making its move to enter the insurance sector isn’t something new. We have already read about payments major Paytm creating two separate wings including a life insurance firm, which aims to offer different types of life insurance policies and take on the state-owned behemoth, LIC that is. Approximately a year ago, Flipkart has shown its intention to enter the insurance sector and has reportedly sought IRDAI approval months ago. The competition, undoubtedly, is going to be tough and expected to result in the favour of customers, as they will have options aplenty and a chance to get the best deal on their insurance premiums.
An e-commerce sector company vouching for a share in the insurance sector is nothing new as Paytm and Flipkart have already shown their intentions clearly. However, Amazon jumping into the field will surely force the big giants in the sector see some share of theirs going to it.
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