It started with books. Then it added simple convenience offerings, shipping discounts and the like. Ten years after its founding, the company took a gamble on cloud computing, staking an early claim that escalated to Internet infrastructure dominance. Within a few years, it was selling eBooks, music, video and more – and its market capitalization was bigger than Walmart.
We're talking about Amazon, of course. The Internet giant that climbed to behemoth proportions in just 25 years. It's not done, either. Rumor has it that Amazon is setting its sights on insurance next.
Alexa: insure my home, please
"At the end of 2016, more than half of all homes in the United States were smart, a total of 21.8 million households according to a report by Berg Insights," CNBC reported. As a "front-runner in the smart home space," Amazon has a growing line of smart home devices – and having broken into the realm of home and hearth, why stop there?
In other words, as long as Alexa is answering your questions, managing your calendar, reading to you, putting your calls through, adjusting the lights and thermostat, unlocking the door and buying household items from Amazon Prime, why shouldn't she be providing your home insurance too?
Easier said than done
Lynne McChristian of the Insurance Information Institute offered one answer. "Insurance is not something you put in a box and ship," she said. "It's one of the most regulated industries in the U.S."
Regulatory complication is just one barrier; another is financial backing. "You have to have the money up front to pay the anticipated claims," McChristian said.
Amazon is big, but its model isn't (yet) conditioned to hurdle those roadblocks.
What's the benefit again?
Another, deeper question follows: does the offering make sense?
As a tech giant, Amazon specializes in disruption. To disrupt an industry, you have to invent something that changes the rules of the game, forcing every other player to adapt or die. If Amazon found a way to undercut insurers with a dramatically lower price point – say by using its smart home devices to detect potential exposures and reduce claims – it could do so. But that's a big if.
"It seems to me that the home security discount you'd get from having an Amazon home monitoring device would not be any different from what you'd get from any other home insurance company for having a security system in place," said Michelle Megna of Insurance.com according to CNBC.
That's not to say that Amazon couldn't enter the home insurance market (provided it were able to hurdle barriers number one and two, above). But to stage an industry takeover, such as it did on the brick-and-mortar bookstore in the nineties, seems out of reach.
(Remember when Google tried selling auto insurance?)
Homeowners insurers: It seems like there's nothing to fear from this corner as of yet. But industry change is everywhere, and it's smart to keep an eye on what's coming down the pike.
The FedNat Insured Web is a great tool for our insureds!
They like having a centralized location to view policy info, make payments, upload policy documents, and elect to become paperless to receive a discount.
The insureds also can file a First Notice of Loss for a claim and access exiting claim info. Silvervine recently enhanced the site which allows insureds to upload policy documents directly to their policy. The uploaded docs go directly into our workflows and save a lot of manual effort on our part.
From my visits with agents, the agents appreciate the app for the amount of time saved on having to download and attach photos directly to the policy.
The app can also reduce the amount of staff required for a busy office to fulfill underwriting requests for photos.
When training agents they are amazed at how quickly the photos attach directly to the policy. After taking photos using the app and before they make it back to their desk, the photo is already attached to the policy. They also like the ability to attach additional photos for pre-existing damage.
Customer Service is seeing an improvement with retention as the text message definitely triggers phone calls from insureds to make payments.
The insureds love the fact that we notify them on their phones because they state that sometimes they don’t receive their mail for various reasons.
The insureds are paying more attention to the texts then to their actual mail. We try to set all of our customers up on that option if we notice that they are not currently enrolled, as it builds great customer relations as well as retention.
As a company we have adopted the use of Policy Scan for all our policies, and our agents have adopted the use of the app as well.
Not only is it easy to use, there is also no more worrying about losing photos, having to store photos or photos being attached to the wrong policy.
With Policy Scan we have increased efficiency in our workflow and reduced our exposure on the risk.
Silvervine’s core administration solutions easily handles multiple carriers within multiple states, including accounting, payment processing, immediate policy issuance and endorsements.
What started out writing one product, one line in one state has now grown into mulitple products, multiple lines and writing in multiple states. We have over $95 million in annualized premium in-force and we expect to grow by 20% during the next year all serviced by Silvervine.
Silvervine was our insurance software system of choice when we started the company in 2006. Silvervine enabled us to begin business within a few months of licensing the company. Today, we are one of the top 20 homeowner’s writers in Texas and SIlvervine’s solutions have been an integral part of our success.