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By Nicole Friedman
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 11, 2018).
Travelers Cos. began selling discounted home-security and sensor devices to its home-insurance customers on Amazon.com Inc. on Wednesday, the first time an insurer has had a retail presence on the online retail giant.
Insurers around the world are scrambling to make their policies simpler and easier to buy. For years, the act of purchasing insurance was driven by local agents. Many Americans still buy insurance from agents, but a growing number prefer to buy policies and file claims online.
Insurers are facing competition from startups trying to appeal to those customers. At the same time, a common guessing game in the insurance business is whether a tech giant like Amazon will enter the space, using its brand loyalty and customer data to compete with insurance providers or agents.
The Travelers-branded page on Amazon offers security cameras, water sensors and other internet-connected home devices from brands including Wyze and SmartThings at a discounted cost to Travelers customers in certain states. Shoppers can pay for Amazon to install the devices. Policyholders with the devices could also be eligible for discounts on their home insurance premiums.
Travelers, the sixth-biggest home insurer in the U.S. by premiums written, recommends these devices to its customers as a way to reduce certain types of common losses including water leaks, fire damage and theft.
The page also encourages shoppers to buy insurance through a local agent or the Travelers website.
Home insurers have been widely experimenting with so-called smart home devices as a way to protect homes against damage -- for example, by alerting homeowners to water leaks early -- and potentially reduce what insurers have to pay out in claims.
"We've always been a company and an organization that responds to losses after they happen," said Michael Klein, executive vice president and president of personal insurance at Travelers. "Part of what we're trying to accomplish here is get even further down the path of helping customers prevent losses in the first place."
Amazon is just one of several potential competitors to established insurance companies. About 60% of U.S. consumers are open to buying insurance from new entrants, including startups or companies outside the industry, according to a survey conducted this year by Bain & Co.
"Customers are not all that sold on the existing incumbents" in the insurance industry, said Andrew Schwedel, a partner at Bain's financial services practice in New York. "That leaves them vulnerable to big tech as a category and somebody like Amazon in particular," because Amazon is known for convenience, he said.
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(END) Dow Jones Newswires
October 11, 2018 02:47 ET (06:47 GMT)
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