What Amazon can teach auto insurance carriers

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A sign for the Amazon.com fulfillment center in DuPont, Wash., is shown Monday, Nov. 30, 2015. (AP Photo/Ted S. Warren)

The insurance industry has been in a marketing arms race for several years, with carriers attempting to outspend, outsmart and outwit each other to increase market share.

Marketing budgets and competition have ballooned, with annual ad spending growing to $8 billion per year across the industry. This dramatic run up has created a ‘new normal’ in insurance marketing.


Along the way, consumer behavior and online shopping trends have been evolving as well. In particular, comparison shopping is now an everyday reality for most consumers. There's now a seemingly endless supply of comparison websites giving consumers easy access to purchase options across just about every industry.

Consumers have a powerful, consumer-friendly internet at their fingertips making them more informed than any generation before them. While many carriers are taking some steps to embrace the current marketplace dynamics, a large percentage are still not fully capitalizing on this shift in consumer experience and expectations.

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The key is providing a good experience for potential clients who are looking for insurance through to the claims process...

There's one company, however, whose approach to the consumer experience offers an interesting and profitable path forward for insurance carriers — Amazon.
What Amazon learned


Amazon has been innovating all aspects of the retail model since their inception, with a strong emphasis on improving the consumer experience. In particular, Amazon definitely understands that comparison shopping is now a way of life and they have taken steps to accommodate consumers. The retailer knows that even if every visitor to their site is not interested in one of their products, they are still interested in making a purchase.

Shoppers are actively searching for something when they visit a site like Amazon, and that subtle distinction in the way they view their website visitors has helped Amazon learn an invaluable lesson about how to help the consumer and improve the overall bottom line in the process.

This forward-thinking perspective means that Amazon is focused on helping consumers find the right products — even if it isn’t from them. Though it might seem counterintuitive, the retail giant has been serving sponsored ad listings for other e-commerce sites alongside its own offerings.

In addition to helping consumers find what they want, the ad listings generate over $400 million per year in additional revenue. As a result, Amazon is recouping 10-20 percent of their marketing budget that can then be reinvested to increase marketing leverage and effectiveness.

Centre-left politician also criticises Google and Facebook and complains that EU states with low-tax regimes have lured multinationalsMultinational companies including Amazon and Starbucks pay less tax in Austria than one of the country’s tiny sausage stands, the republic’s centre-left chancellor lamented in an interview published on Friday.

Chancellor Christian Kern, head of the Social Democrats and of the centrist coalition government, also criticised internet giants Google and Facebook, saying that if they paid more tax subsidies for print media could increase.

“Every Viennese cafe, every sausage stand pays more tax in Austria than a multinational corporation,” Kern was quoted as saying in an interview with newspaper Der Standard, invoking two potent symbols of the Austrian capital’s food culture.

“That goes for Starbucks, Amazon and other companies,” he said, praising the European Commission’s ruling this week that Apple should pay up to €13bn ($14.5bn) in taxes plus interest to Ireland because a special scheme to route profits through that country was illegal state aid.


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Apple has said it will appeal against the ruling, which CEO Tim Cook described as “total political crap”. Google, Facebook and other multinational companies say they follow all tax rules.


Kern criticised EU states with low-tax regimes that have lured multinationals – and come under scrutiny from Brussels. “What Ireland, the Netherlands, Luxembourg or Malta are doing here lacks solidarity towards the rest of the European economy,” he said.

He stopped short of saying that Facebook and Google would have to pay more tax but underlined their significant sales in Austria, which he estimated at more than €100m each, and their relatively small numbers of employees – a “good dozen” for Google and “allegedly even fewer” for Facebook.

“They massively suck up the advertising volume that comes out of the economy but pay neither corporation tax nor advertising duty in Austria,” said Kern, who became chancellor in May.