New Home Delivery Option Poses Questions for Insurers; QIS Discusses Possible Repercussions

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The recently announced “Amazon Key” will make life more convenient for some busy householders. However, the new technology may also affect people’s insurance rates.

According to a 2015 report from, 23 million Americans have had recently delivered packages stolen from their homes before they could even open them.1 In response to this problem, Amazon has just announced a service called Amazon Key, which—with the customer’s permission—enables an Amazon courier to unlock the front door and drop packages inside when no one is at home.2 “For a lot of people, this will be a real convenience,” says Michael Macauley, CEO of Quadrant Information Services, a leading supplier of pricing analytics services to property and casualty insurance carriers. Macauley adds, “However, it also raises some interesting questions about homeowners insurance rates.”

Amazon’s new service will require customers to purchase a kit that starts at $250 and includes a security camera made by the company and a smart door lock made by Yale or Kwikset. When a delivery arrives at the customer’s door, the lock first helps Amazon verify that the driver is at the correct address at the appropriate time. It then starts recording video and unlocks the door. The company says that Amazon Key will be available in 37 cities in the U.S. beginning Nov. 8th and will open to Prime members, who pay $99 per year for fast shipping and other benefits. The service can also be used to grant home access to other services, such as Merry Maids (a housecleaning provider) and (a dog-walking company).3

Initial reaction to the announcement has not been uniformly positive. According to CNET, people took to social media to deride the new service as an infringement of their privacy and a way for thieves or murderers to walk right into their living rooms. A columnist for the Washington Post—which is owned by Amazon CEO Jeff Bezos—called the service “Silicon Valley at its most out-of-touch.”4

A different take on the new offering was offered by Peter Larson, Amazon’s vice president of delivery technology. Larson told ABC News that “a lot of customers would love to have their packages delivered to their home, even when they’re not there.” Larson addressed the skepticism many may feel about remotely allowing strangers to enter their homes, saying that all drivers will be background checked.

“Amazon is really focused on safety and security for all of our customers across the board,” Larson said. “These are the same drivers that you know and trust to deliver your Amazon packages today.” Acknowledging the cybersecurity concerns that some customers may feel when using technology which controls access to their homes, he said, “The data travelling between the devices and the Amazon Cloud is encrypted.” Amazon, he added, has an “over-the-air update system, so we can update all the devices if we need to.”5

An open question in all this, notes Macauley, is the effect that Amazon Key (along with any competing remote-access systems which will inevitably emerge) will have on the insurance industry. “Everyone is talking about the invasion of privacy issues,” he says, “but what about homeowners insurance? Does allowing strangers into the home with no supervision warrant a rate increase? The short answer is, we don’t know yet. The insurance industry is going to have to explore this technology and determine what the risks are. At Quadrant, we’ll take our usual two-pronged approach. On the one hand, we’ll be studying the technology to understand what it offers in terms of benefits and liabilities. On the other hand, we’ll help agents and carriers to understand—zip code by zip code and maybe street by street—how their competitors are reacting to this technology in terms of rate-setting. It’s how we help our customers keep up with a rapidly changing world.”

About Quadrant Information Services:
Quadrant Information Services, headquartered in Pleasanton, CA, provides pricing analytics solutions for property and casualty insurance companies. Quadrant gives actuary, product development, pricing, sales and marketing personnel at its client companies—which include all of the major insurance carriers in the United States—the data they need in order to make accurate, data-driven decisions. An industry innovator since its founding in 1991, Quadrant has provided the P&C insurance field with a long series of technological advances, including InsureWatch, the industry’s first cloud-based pricing tool, which allows the user to produce unlimited combinations of reports with the click of a mouse. For more information, and to learn why Quadrant is for insurance companies that are tired of losing the right customers and winning the wrong ones, please visit

1.    “23 Million Americans Have Had Packages Stolen from their Doorsteps,”, December 2, 2015.

2.    “Amazon Introduces Amazon Key,” Federal Reserve News, October 25, 2017.

3.    Wingfield, Nick, “Amazon’s Latest Way Into Your Life Is Through the Front Door,” New York Times, October 25, 2017.

4.    Rubin, Ben Fox, “Amazon Key’s big privacy test is now in your hands,” CNET, November 7, 2017.

5.    Thorbecke, Catherine, “Amazon’s new service will allow drivers to enter your home to deliver packages,” ABC News, October 25, 2017.

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Karla Jo Helms
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