Business insurance broker Superscript has said that Amazon (AMZN) plans to offer insurance to small and medium-sized businesses in the U.K., according to a report by Reuters. The company will be offering business insurance in the country for the first time.
Superscript will provide insurance covers like professional indemnity insurance, cyber insurance and contents insurance to members of Amazon’s Business Prime program. A spokesperson of Superscript said that “major U.K. insurers” will underwrite these covers.
Furthermore, in a bid to attract businesses, the insurance covers will be offered at a 20% discount. (See Amazon stock chart on TipRanks)
The Country Manager for Amazon Business U.K. & Ireland, Molly Dobson, said, “As businesses come out of the pandemic and gradually resume normalcy, we want customers to have the best-in-class tools to run their business.”
The CEO of Superscript, Cameron Shearer, said, “The (insurance) industry needs to bridge the divide between insurers and customers by providing a quick, smooth buying process that is customer-centric.”
Amazon’s entry into the U.K. business insurance segment follows U.S. insurtech Next Insurance’s announcement in March that it is offering insurance cover to small businesses in the country via Amazon Business Prime.
Amazon already offers “buy now, pay later” services and warranty insurance in Britain.
On September 13, Bank of America (BAC) analyst Justin Post reiterated a Buy rating on the stock with a price target of $4,250 (24.8% upside potential).
The analyst said, “The ability for SMB merchants to capture direct Online sales, off of marketplaces, is a long-term potential threat to Amazon, so we expect Amazon to offer a feature-rich product with deep integration with Amazon’s marketplace, fulfillment, checkout, and payments processing capabilities (with a possible discount on payments processing).”
“We expect some entrenched resistance to Amazon services due to competitive concerns, but the opportunity is big and Amazon’s existing customer relationships provide a foundation to help build adoption,” Post added.
Overall, the stock has a Strong Buy consensus rating based on 31 unanimous Buys. The average Amazon price target of $4,214.47 implies 23.7% upside potential. Shares have gained nearly 10.7% over the past six months.
According to TipRanks’ Smart Score rating system, Amazon scores a “Perfect 10,” suggesting that the stock is likely to outperform market averages.
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