Amazon takes aim at U.K. insurance market

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(Bloomberg) Inc. has disrupted countless markets, including groceries, prescription-drugs and even pet food. The latest to face the tech giant: U.K. insurance price-comparison websites.

Shares of Group Plc fell as much as 10 percent, while peer Group Plc dropped 4.7 percent in London trading after Reuters reported that Amazon is holding talks with insurance companies regarding creating a rival website. Admiral Group Plc, the U.K. car insurer which owns comparison service, fell as much as 2.4 percent.

While the Reuters report -- which cited unidentified industry executives -- said it is unclear what insurance products would be sold and that there are no imminent plans to launch a site, the mention of the e-commerce behemoth has traditionally been enough to sink stocks seen to be under threat.

Amazon has “all the tools to succeed” and is a bigger threat than Alphabet Inc.’s Google, which also made a play for the U.K. price-comparison industry a few years ago, Canaccord Genuity analyst Simon Davies said via email. Amazon has “a powerful brand, strong technology skills and a lot of cash to put behind the brand. It will take some time, but this looks like a significant medium-term negative for the incumbents,” Davies said.

RBC’s Kamran Hossain agrees. “A new entrant with the brand power and resources of Amazon, and the ability to charge the insurers lower commissions versus the current players would certainly be a threat to the insurance franchises of the incumbents,” the analyst said by email.

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