Amazon / Insurance price comparison sites and on the beach

“Investors will be very relieved there isn’t a continuation of yesterday’s market slump on Thursday. The FTSE 100 manages to claw back some of the lost territory with a 0.2% gain to 7,511.

“European markets follow suit, although Asia had another bad day with markets in India, Hong Kong and Japan all in the red, suggesting that some investors still remain very nervous about the state of the affairs,” says Russ Mould, Investment Director at AJ Bell.

Amazon / Insurance price comparison sites

“Business bosses around the world increasingly live in fear of Amazon as it seems there is no industry that the tech giant doesn’t want to disrupt.

“The latest shockwave can be felt in the financial services sector on reports that Amazon may launch an online insurance price comparison website. GoCompare, Moneysupermarket and Admiral (which owns Confused.com) all saw their share price fall following the news.

“Amazon already runs a credit card comparison service called Money Store, albeit with a very limited range. Earlier this year there were rumours it was considering a banking service.

“Expanding into financial services may seem a strange move for a retailer, yet it makes sense when you consider Amazon’s incredible reach and engagement with such a wide range of consumers.

“Home, travel and car insurance are already highly competitive markets from both an underwriting perspective and the number of price comparison sites. That won’t bother Amazon as its muscle power and wide reach could give it a fighting chance of making a big success from facilitating the sale of third party insurance policies.

“Other industries linked with a potential move by Amazon include pharmaceuticals and business supplies distribution. And it has already made waves with food delivery and logistics.

“So what’s next? Can Amazon become an estate agent? Perhaps a more logical move would be to extend into the travel sector, offering discounted holidays, cruises and car rental.”

On the beach

“Sometimes the market is genuinely efficient. Shares in online beach holidays specialist On The Beach had been weak in the run-up to today’s trading update amid a perception the World Cup and UK heatwave would have negatively impacted demand.

“This has proved to be the case. Flagging pressure on headline revenue and guiding for profit to be ‘broadly’ in line with expectations, the company has essentially delivered a mild profit warning. And it sounds like even achieving this level of performance is dependent on a recovery in August and September.

“However, investors have reacted positively, perhaps noting that, unlike rivals with large numbers of high street outlets, On The Beach can rapidly respond to fluctuating demand by scaling back on marketing spend, which is one of its largest costs.

“The company has also announced the £20m acquisition of Classic Collection Holidays. OnTheBeach will hope to leverage its online knowhow to boost returns from what is currently an offline high-end operator selling packages through third parties.”

These articles are for information purposes only and are not a personal recommendation or advice