Amazon

Amazon Considers Offering Home Insurance

Amazon.com has contemplated offering home insurance as an offshoot of its development work on robots and other connected devices for the home, according to a person familiar with the discussions. The idea is 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.

While there’s nothing that suggests Amazon has any concrete plans for insurance, the fact it was discussed shows how ambitious Amazon is to sell home services. 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 Takeaway
As Amazon.com develops a widening array of products for the smart home, including robots, it is also discussing offering home insurance. It’s an example of services that Amazon can offer as an add-on to connected devices.

Amazon has yet to roll out any insurance products. The company recently partnered with JP Morgan and Berkshire Hathaway to look at ways of overhauling health insurance. Amazon didn’t have an immediate comment.

Amazon is developing robots that could rove around homes, performing various tasks, including checking for problems. The robots will be equipped with cameras and sensors that can detect smoke, carbon monoxide, excess heat or loud noises. A robot could, for example, point a camera at a window after hearing it shatter. News of the robots was first reported by Bloomberg, which said in April that Amazon hopes to begin putting home robots in employees’ homes by the end of this year.

Amazon has developed robots in several forms, including at least one animal, the person said. But it could take years for Amazon to develop robots that can navigate a home and perform certain tasks and that can be priced low enough to become a mass market device, the person said.

But Amazon could move into insurance even before the robots are ready. It already sells a number of smart home devices powered by its Alexa digital assistant, including smart door locks and internet-connected security cameras, that it could bundle with an insurance policy.

Several insurance companies have partnered with smart home and security device makers, promoting their devices in exchange for a discount on insurance premiums. In 2016, for instance, Liberty Mutual Insurance partnered with the smart lock maker August Home to offer customers $100 off one of the startup’s locks and 5% off home insurance. (The insurance company also invested in August through its venture capital arm.)

Liberty Mutual has also partnered with Nest, Vivint, which offers smart home and home security services, and another company called Canary. State Farm has partnerships with ADT and Canary.

“A high percentage of home burglaries are actually from unlocked doors, so it helps eliminate that. That’s why they give the discount,” said August Home CEO Jason Johnson.

Mr. Johnson, whose company makes products that work with Alexa and received an investment from Amazon before it sold to the Swedish lock-maker Assa Abloy last year, said he would not be surprised if Amazon began offering a new type of insurance alongside a home security system.

“How do you control the home and make your home an Amazon home?” Mr. Johnson said. “It certainly would also help them to lock up a household … it’s an amazing differentiator for them.”

Amazon has introduced other home services, such as cleaning, repairs and lawn-mowing, that can benefit from data gathered by smart home devices.

Amazon has struck partnerships with home builders to embed Alexa devices into new houses. In May, Amazon announced that it was opening “experience centers” in model homes built by Lennar, one of the biggest homebuilders in the U.S. In these centers, people could test how easy it is to use Alexa to turn on lights, adjust the temperature and order more soap with an Amazon Dash Button.