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In partnership with Acko General Insurance, Amazon has decided to start selling auto insurance in India. AMZN stock went up in the pre-market today.
The Indian outlet of Amazon.com Inc (NASDAQ: AMZN) has announced it started selling auto insurance in the populous Asian country. Auto insurance is available to cover both two and four-wheelers in the country. The debut of the e-commerce giant into insurance became achievable with the partnership with India’s renowned Acko General Insurance, the firm Amazon has a stake in. As the company’s first dive into the financial services world, it is promising to run its services with a difference, providing the easiest mode of buying insurance without extensive paperwork.
“This coupled with services like hassle-free claims with zero paperwork, one-hour pick-up, 3-day assured claim servicing and 1-year repair warranty – in select cities, as well as an option for instant cash settlements for low-value claims, making it beneficial for customers,” the announcement reads.
Following the news about insurance services, Amazon (AMZN)stock experienced a pump in today’s pre-market. Now the price is rising 0.21% with a $6.49 gain to erode yesterday’s bearish close at $3,099.91. AMZN has attracted a lot of analyst hype in the past days as the company’s performance post-COVID-19 lockdown keeps complimenting its gains whilst the lockdown was at its peak.
A more detailed look at Amazon’s performance shows that toward the end of Q1, the lockdown prompted many consumers to turn to e-commerce for essential items, thus boosting revenue in that time frame. Total sales rose 26% year over year during the period. As affirmed by the experts, Wall Street analysts, on average, are expecting more elevated sales growth in Q2, forecasting a 28% year-over-year jump. For the full year, the consensus view is for 24% sales growth. Should this projection kick through, AMZN shares may surpass its 52-week high of $3,344.29.
Insurance Industry as a Way for Amazon Services Diversification
As one of the world’s most reputable brands, Amazon has shown its growing love for automobiles first by acquiring a stake in robotic car manufacturer Zoox and also with this insurance push. The auto insurance offering will particularly extend the company’s reach in India. The insurance service which will be accessed through Amazon Pay has been pitched to give a seamless insurance claim experience as adduced by Vikas Bansal, director and head of financial services at Amazon Pay in India.
His statement reads:
“Our vision is to make Amazon Pay the most trusted, convenient, and rewarding way to pay for our customers. Delighted by this experience, there has been a growing demand for more services. In line with this need, we are excited to launch an auto insurance product that is affordable, convenient, and provides a seamless claims experience.”
Indian customers subscribed to the company’s loyalty program Amazon Prime which costs approximately $13 in India will have extra benefits and more discount incentives.
India’s insurance sector is fast becoming a growing investment niche in the financial sector. According to data from India’s rating agency ICRA, insurance products had reached less than 3% of the population as of 2017. Propelled by this, many investors are being drawn therein. The emergence of Amazon Insurance service will face strict competition from existing insurance firms such as Raheja QBE, a growing startup that has attracted a $76 million funding from Paytm a few weeks back