The Amazon steam-roller targets the security and insurance industries

//The Amazon steam-roller targets the security and insurance industries

The Amazon steam-roller targets the security and insurance industries

It seems that second-guessing what Amazon might do next is becoming a sport and it might be an idea to start taking bets.

In the last few weeks I’ve seen some interesting pieces that suggest that their work to expand into the Smart home will drive them down the path to acquire a professional security installation company such as Vivent in the US, see Julie Jacobson’s piece at CE Pro. https://www.cepro.com/article/amazon_security_company_vivint_guardian_brinks  More recently, Stacey Higginbotham suggests insurance might be their big move as reported by https://www.theinformation.com/articles/amazon-considers-offering-home-insurance.

Amazon has continued to make smart moves in this space and, despite their excellent track record, some industries still seem to think these giants will not dare to enter their market to compete. The security and insurance industries are good examples.

In the security industry, there is a belief that Amazon will partner to help grow the traditional business models that exist and they will enter through acquisition.

I struggle with the idea that Amazon would bother to acquire a traditional security company. I understand all of the arguments and the suggested logic about the regulations, the workforce, the high recurring monthly revenues etc. However, the reality is that they don’t need to and it doesn’t fit with their traditional playbook. On the other hand, their move to acquire Ring was a really smart move, https://www.linkedin.com/pulse/amazon-acquire-ring-seriously-smart-move-kevin-meagher/

Amazon favors disruptive business models and the security industry is a ripe target. In my view, they’ll have no interest in adopting and expanding the traditional security industry business model with long fixed term contracts, high operational costs, and difficult regulatory framework. They’ll do what companies like Lowe’s, Samsung Smart Things, and others have done when entering the space and go direct to consumers with DIY solutions and a much broader range of products and services including installation.

The Insurance industry will require different tactics. The insurance industry tends to believe that the complexities of their regulatory framework will somehow protect them from disruption. However, it seems to me that Amazon can simply partner some of the larger reinsurers and instantly compete directly with the big consumer brands.

It really makes sense for them to attack the insurance industry because if they do drive smart devices and services into the marketplace, they will be able to leverage data to get a better understanding of insured risk and then create innovative, new products. For example, I suspect they will be quick to deploy an interesting range of new warranty products for smart devices, appliances, and potentially, whole home systems.

For those people in the insurance industry that don’t believe the IOT is a game changer, take note.  Agreed, this could be a false alarm and, at the Connected Insurance Summit in London, http://events.insurancenexus.com/connectedeurope/ , I’m sure many insurers will be showcasing their strategies and working to learn from their peers.  Hopefully, these developments with Amazon might stir a very traditional industry into moving more quickly to market. If not, they will be making the mistake retailers made and could finish up reflecting that they did too little, too late. I’ll be at the Connected Insurance Summit in London on the 11/12 June, so if you are attending and disagree, I’d be happy to meet and debate the strategies that would help insurers to compete in the smart home space.

By | 2018-11-13T21:39:01+00:00 June 8th, 2018|Retail|0 Comments

About the Author:

Kevin is a seasoned entrepreneur and experienced senior executive that has been extremely successful in a wide range of challenging positions in competitive and pressurised environments. Widely recognised as Thought Leader in the consumer Internet of Things and Connected/Smart home, Kevin is a regular speaker at national and international conferences. He has been a pioneer of the use of Cloud computing to deploy innovative new SaaS business models in support of manufacturers, retailers, and service providers with both B2B and B2C business models. Comfortable leading a start-up or working in a Fortune 50, he has a proven track record in building new businesses and teams that deliver results and drive shareholder value. An astute strategist, he can quickly identify critical business requirements, recognise opportunities for enhancing competitive advantage, and secure transformational change. The recipient of prestigious national and international awards including Ruban D’Honneurs as European Entrepreneur of the Year, he is an outstanding leader and team worker with the interpersonal skills and personality to deliver. Kevin holds 3 patents

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