The US-based small business insurtech is easing Amazon Business Prime members’ access to a wide range of policies, including general liability and workers’ compensation, per PR Newswire. Founded in 2016, Next Insurance uses AI to tailor coverage to small businesses. Amazon Business Prime provides businesses with fast shipping, discounts on products they buy the most, purchasing and spending analytics, and more.
Partnering with the tech giant is a huge win for Next Insurance, further diversifying its distribution channels. The insurtech’s gross written premiums doubled to $200 million in 2020 thanks to its AI-powered underwriting driving down prices by up to 30% compared with traditional policies and customizing online quotes in less than 10 minutes. Next Insurance is now actively partnering with third-party platforms to better reach small businesses and keep this growth momentum going, and it already teamed up with accounting fintech Quickbooks in October. Now, Next insurance can reach the millions of small businesses that use Amazon Business Prime, per PR Newswire, further accelerating its sales.
Amazon’s move will push insurers to adapt or risk being displaced.
- Amazon is deepening its competitive moat with insurance. Amazon’s foray into financial services aims to reduce buying/selling friction and the need for its users to ever leave its platform. It already requires certain sellers to have insurance, such as liability coverage, to sell on its platform, yet only 28% of US small businesses have an owner's policy, creating a coverage gap that could cause SMBs to miss out on selling opportunities. With Next Insurance, Business Prime members can seamlessly get insured, enhancing the convenience of using Amazon to sell their products.
- Insurers should partner with Big Tech firms to meet customer demand for a smoother digital experience. With Next Insurance making this move, it’s imperative for insurers to also start assessing ways to benefit from Big Tech companies’ interest in insurance to boost their sales. Customer willingness to purchase insurance from Big Tech reached 44% in 2020, up from 17% in 2016, per Capgemini’s World InsurTech Report 2020, thanks to their strong focus on hassle-free customer experiences. Insurers can therefore overcome their own shortfalls in this area by offering their policies directly on such platforms. In addition, Big Tech companies infamously gather and analyze a wealth of data on their users, which could be used to funnel insurers’ premiums to the most appropriate SMBs.