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UK Insurance Aggregators 2016

Published By :

Verdict Financial

Published Date : Mar 2016

Category :

Banking

No. of Pages : 40 Pages


New legislation is set to promote switching in a market where fewer customers have been looking to change insurance provider. This promotion of competition and consumer transparency will reinvigorate the aggregator channel and make it more relevant for customers. The use of wide most favored nation clauses has been banned. This will make the aggregator market more competitive as insurers are no longer prohibited from selling a policy for a lower price on another price comparison site or channel. Currently customers show strong loyalty to a particular aggregator, so as aggregators start to differentiate, customers will look to more than one at the point of renewal. Legislation is also looking at improving the purchasing process in order to improve transparency for customers. There will be a greater emphasis on the value of products over the next few years as well as further disclosure for customers at the point of renewal. Well established in the UK, the Big Four price comparison sites are now looking to expand beyond the dominant lines of motor and home insurance, while brand owners are using their expertise to enter international markets. Changing consumer habits incentivize brands to invest in technology (most notably the mobile channel) in order to upgrade their service. The challenge, however, is to keep the service simple in a market where insurers have greater responsibility to obtain information and customers show greater demand for information.

Key Findings

  • Customers are loyal to their aggregator but not their insurance provider.
  • Policy price is the key determinant for customers purchasing through an aggregator.
  • Aggregators are building a connection with customers through advertising.

Synopsis

Verdict Financial

Table of Contents

EXECUTIVE SUMMARY

Aggregators are going through a transitional period
Key findings
Critical success factors

THE AGGREGATOR MARKET
Introduction
Aggregators are losing relevance for customers
Online research is moving away from aggregator sites
Fewer customers are using aggregators to purchase insurance
Conversion rates remain fairly steady year-on-year
Fewer customers are looking to switch provider
Customers are loyal to their aggregator but not their insurance provider
Aggregator selection is based on site familiarity, price, and search engine rank
Policy price is the key determinant for customers purchasing through an aggregator
Over 90% of customers don't look past the top 10 results of a quote

BRAND STRATEGY OF THE BIG FOUR
The Big Four are becoming the Big Two
Moneysupermarket.com and Comparethemarket.com dominate the insurance market
Big Four web traffic is increasing
Aggregators are building a connection with customers through advertising
The impact of aggregator advertising is felt more positively than negatively by consumers
Moneysupermarket.com is investing in technology to upgrade its existing service
Insurance generates over half of the Moneysupermarket.com group's revenues
Moneysupermarket.com's three-year technology-focused investment program aims to transform the customer journey on mobile devices
Moneysupermarket.com favors television advertising
Moneysupermarket.com finds its niche after #EpicStrut goes viral
Comparethemarket.com relies on marketing campaigns to keep customers engaged and loyal
Comparethemarket.com was the first of the Big Four to introduce an iconic character to market its brand
Character merchandise promotes customer loyalty and affiliation
Comparethemarket.com launches two-for-one cinema tickets with Meerkat Movies
Comparethemarket.com collaborates with the University of Sheffield to explore customer behavior
The BGL Group aims to maintain the position of Comparethemarket.com while using its marketing expertise to expand other brands
Comparethemarket.com's advertising expenditure has fallen significantly
Gocompare.com aims to make its marketing more effective, reduce costs, and expand its products lines
Gocompare.com's acquisition by esure will reinvigorate the brand
Gocompare.com aims to improve efficiency by spending less on advertising
The return of Gio Compario aims to recover brand awareness
Gocompare.com is to expand product opportunities outside of home and motor
Admiral is prioritizing expansion of its new US aggregator over Confused.com
Confused.com is trying to recover revenue losses incurred by building brand awareness like Comparethemarket.com
Confused.com follows in the footsteps of Comparethemarket.com with Brian the Robot
Social media encourages customers to interact with Brian

THE MARKET GOING FORWARD
Wide MFN contract clauses have been banned within motor insurance to promote competition
New regulations for add-on products will increase transparency for customers
Insurers will have to provide more disclosure at the point of renewal
Customers will be more aware of where their money goes
Value will become a greater focus for aggregators
Video and audio will be used to read policy terms
Aggregators will develop their mobile channels to keep up with consumer habits

APPENDIX
Abbreviations and acronyms
Definitions
Home insurance
Pet insurance
Methodology
Primary sources
Secondary sources
Bibliography
Further reading
About Verdict Financial
Disclaimer

List of Table

Table 1: Most customers switch provider at the point of renewal
Table 2: Fewer customers are switching provider, with more opting for automatic renewal
Table 3: Price was influential to customers when selecting an aggregator
Table 4: Moneysupermarket.com is experiencing year-on-year growth
Table 5: 80% of Gocompare.com's income is generated by home and motor insurance

List of Chart

Figure 1: The use of aggregators to research insurance products is decreasing
Figure 2: Fewer customers are purchasing insurance products through aggregators
Figure 3: The conversion rate is highest for customers purchasing travel insurance
Figure 4: Customers remain loyal to an aggregator they have used before
Figure 5: Price is the most influential factor when selecting a policy
Figure 6: Customers typically select one of the cheapest policies available
Figure 7: Moneysupermarket.com and Comparethemarket.com are the leading aggregators
Figure 8: Moneysupermarket.com has the most UK web traffic of the Big Four
Figure 9: Total marketing expenditure varies for the Big Four
Figure 10: Marketing campaigns are more effective for the Big Four than for smaller sites
Figure 11: Television is Moneysupermarket.com's preferred advertising medium
Figure 12: Comparethemarket.com has significantly reduced its marketing spend
Figure 13: Gocompare.com reduced its advertising spend in 2015
Figure 14: Confused.com has increased its advertising spend in 2015

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