Amazon’s tie-up with Travelers, which allows consumers to purchase smart home kits alongside insurance, highlights the potential benefits collaborating with those outside the insurance industry can have.

The Amazon Travelers deal will provide Travelers customers in dedicated US states with access to smart home kits that include security cameras, leak detectors, motion sensors, a smart hub, and an Amazon Echo Dot at a discounted price. Eligible customers will also benefit from a discount on their home insurance policy alongside their smart home kit.

Incorporating smart home technology into the household brings clear benefits for both insurers and policyholders. For example, earlier detection of escape of water through the use of leak detection devices could reduce the severity and cost of a claim. Amazon also stands to benefit. As well as providing the company with a new way to reach customers with its own smart products, it may also allow it to become an established provider in the connected home insurance place, potentially enabling it to venture into the insurance market alone.

Amazon Travelers deal

Despite the benefits smart home technology can bring, uptake has been low. Household insurance premiums are typically too low for insurers to offer devices for free, and from a consumer perspective the technology is often seen as offering little value. But this deal could help overcome this barrier – with customers benefiting from a discount on both the technology and premiums they may be more inclined to purchase the smart home kit. The inclusion of the Amazon Echo Dot and the device’s ever-expanding functionality will also help drive interest. Travelers have developed an Amazon Echo Skill, which will boost customer engagement and help Travelers justify the expense of smart home technology.

With many insurers in the industry seeing Amazon as a potential threat to the status quo, this tie-up is a prime example of why it should not be disregarded as a potential ally. With prospective customers only able to purchase this product through an Amazon page dedicated to Travelers it is clear Amazon is seeking to own the distribution of the product, . This could give an indication into Amazon’s longer-term plans for entering the insurance market, sticking to its specialty as a distributor of goods as opposed to becoming a provider.