Bezos Vs Buffett? Amazon Contemplating Offering Home Insurance
Having already destroyed the "brick and mortar" retail sector, and looking to expand into various other industries from groceries to healthcare to banking, it is probably not surprising that Jeff Bezos is quietly seeking to the big kahoona, Berkshire Hathaway, by launching a home insurance business.
As the Information reports, Amazon.com has "contemplated offering home insurance as an offshoot of its development work on robots and other connected devices for the home" with the underlying idea being that robots and other smart devices can be used to monitor for threats such as fires and burglaries, making it possible to offer cheaper premiums.
And while the publication cautioned that there is "nothing that suggests Amazon has any concrete plans for insurance, the fact it was discussed shows how ambitious Amazon is to sell home services." It is this latest "ambition" that spooked the S&P insurance index which promptly slumped on the news.
That said, some such as Bloomberg macro commentator Michael Regan are skeptical, noting that "home insurance is a complicated industry; it can involve sending adjusters to homes to assess storm damage. And you can't just store those guys in a warehouse."
Of course, the premise is relatively simple if all it involves is integrating the various IoT enabled homes to merely sound the alarm when something is wrong: As The Information has previously reported, Amazon sees Alexa-powered devices such as smart locks, light bulbs and the Echo as helping it sell services such as house cleaning.
The risk, of course, is what happens when the underlying technology malfunctions as it recently, and embarrassingly has on at least two occasions, first when Alexa started laughing "creepily" a month ago, without reason, and more recently, when it was revealed that Alexa had been secretly recording a Portland couple's conversation and then emailed it to a 3rd party. What can possibly go wrong when this same flawed underlying technology is used to secure and protect valuables and lives...