Internet commerce giant Amazon plans to sell insurance in India, according to filings by its Indian unit with the Ministry of Corporate Affairs, reports BloombergQuint.
Amazon India wants to start by selling life, health and general insurance, say its filings with the Registrar of Companies. It aims to carry out the business of soliciting, procuring and servicing insurance as a corporate agent.
The firm’s digital-payments arm, Amazon Pay, is slated to roll out the specific products, along with other financial products like loans and EMI services.
E-commerce firms whose business model lies in forming a “customer connect” try to “sell everything their customer needs”, including, now, insurance products, said Kalpesh Mehta, partner at auditing firm Deloitte Haskins & Sells.
Amazon will be following on the heels of other online companies which are entering the insurance market.
In February this year, payments major Paytm created two separate insurance companies, including a life insurance firm designed to compete even with state-owned behemoth LIC. The company, already backed by Softbank and Alibaba, received a “game-changer” of an investment from Warren Buffet just two weeks ago.
A year ago, India's biggest online commerce company Flipkart, in which Walmart acquired a controlling stake this May, reportedly declared its intent to enter the insurance market.
Flipkart reportedly sought the IRDAI approval months ago, but there’s been no word since. Paytm, on the other hand, received the nod last September, and has incorporated its two insurance companies, Paytm Life Insurance Corporation and Paytm General Insurance Corporation. Amazon, on its part, is yet to apply for a licence, according to sources cited in BloombergQuint’s report.
Room for growth
Overall insurance coverage in India remains quite low in India. Between 2001 and 2017, it rose by just one percentage point, from 2.7% to 3.7%, according to a study by industry body Assocham. The insurance coverage is projected to grow far more quickly in the next few years, with the industry value estimated to rise from the current $72bn to $280bn by 2020.