UK insurance comparison firms' shares slump as Amazon plans to launch rival site

(Sharecast News) - Shares in UK insurance price comparison firms such as GoCompare and Moneysupermarket have taken a hit following a report that Amazon is plotting the launch of a UK price comparison website for insurance.The company had already discussed such plans with three industry executives, Reuters reported, although one of the sources no launch was imminent, while another said the talks were part of broader discussions with insurers.It was still unclear what type of insurance would be sold, but some analysts believed home and motor insurance would be logical 'next steps' in the company's expansion into the 'brick and mortar world' and financial services, with the site likely to pose a serious challenge to existing UK comparison websites thanks to Amazon's cutting-edge technology and wide customer base.In an initial reaction, shares of GoCompare initially slumped by nearly 10% in early trading on Thursday, although the losses were later pared to 4.2%. Shares of Moneysupermarket meanwhile, which lists insurance products from the likes of Santander and LV, were off by 3% and those of Admiral by 1.2%.Ross Mould, investment director at AJ Bell, said: "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," he added.It's not the first time Amazon dabbles in the financial services industry as it already runs the Amazon Money Store which features a small selection of credit cards from companies such as Aqua, Provident Financial's Vanquis brand, and Royal Bank of Scotland.Intriguingly, Reuters also reported on how - in a possible sign of its intentions - in 2017 Amazon had begun placing job ads for a new insurance business in Europe.Separately, overnight Bloomberg reported that the online retailer was also in the running to purchase Landmark Theatres in the US, the owner of over 50 theatres specialising in independent and foreign films, broadening its footprint in the media space.