One in five consumers would buy home insurance from Amazon or Google, according to a J.D. Power & Associates Pulse survey. The research comes as Amazon is exploring potential entries to the insurance sector.

The research, which consists of responses from 650 individuals, also found that three-quarters of them are interested in home telematics, or devices that provide a real-time stream of data about the condition of their homes. Just under half of consumers overall, and 56% of those with smart-home sensors already installed in their home or appliances, are willing to share that information with their insurance companies. And more than a third would switch to an insurance provider that offered a device-driven risk-management program along with their home insurance.

With a market shaping up that seek more digital solutions, Amazon's range of home technology devices, data mastery and distribution capabilities give it a clear opening to meet those needs. And it has made a number of moves in 2018 that draw it closer to the home insurance sector. It made two major investments in Acko, an Indian insurtech whose stated goal is to be the first online-only carrier in the country. A report in The Information in June said the company had already had internal discussions about offering coverage itself. And, in late August, a report in Reuters indicated that the company was looking into launching a home-insurance aggregator in the U.K.

"Imagine how [Amazon] can apply what it already knows about the consumer to insurance," Forrester analyst Ellen Carney told Digital Insurance in e-mailed remarks after the Reuters report. "The beauty of Amazon is that they can go beyond what customers say to how they behave, based on what they shop for and ultimately purchase."

While operating as an aggregator still leaves Amazon one step removed from legacy insurers, Carney notes that the channel is exceedingly popular in Europe, "and U.S. comparison engine users are younger and wealthier than the average online adult."

Younger and wealthier also describes smart-home device users, especially those who are using items like Amazon's Echo speaker. CapTech Consulting found that 85% of smart-speaker users were either MIllenials or Generation X; 58% have household income over $75,000.

"It's a natural up- and cross-sell," Carney says. "[Amazon will] know who's shopping for home or renters insurance, and what better time to pitch the value of the smart home or apartment that's managed by Alexa."

But simply being Amazon won't help the company stand out. There also is room to improve the customer experience overall. In the J.D. Power research, customers identified three key areas they feel home insurers could improve in:



Product options/coverages – 20%

Underwriting sophistication – 15%

Claims – 14%

If any of Amazon's rumored entries are to bear fruit, it will have to solve those customer needs -- not just put a new skin on the traditional insurance product.

"Amazon is clearly exploring potential opportunities in insurance," Novarica president Matt Josefowicz told DI in June. "Insurers should watch closely to see how Amazon understands consumers' understanding of their own risk and protection needs.