Net Metrics: Consumer Researching and Purchasing Trends in UK Internet Insurance (2007 edition)

Published by: Finaccord Ltd.

Published: Mar. 1, 2007 - 158 Pages

Table of Contents

0.0 EXECUTIVE SUMMARY

Research background and structure

The number of customers for on-line insurance may have reached a temporary peak

Consumers are not particularly fussy about the exact type of web site used for buying ins.…

… with the result that most on-line sales can be classified as ‘intermediated’ rather than ‘direct’

Event sponsorship appears to be increasing in effective. as a marketing prompt for consumers

Over a quarter of on-line insurance buyers still seek quotes from seven or more web sites…

… and over a quarter are happy to use sites without telephone support as long as they trust them

Consumer awareness of Confused.com has increased significantly during the last 12 months

Recognition levels of the leading on-line providers of general price comp. services are high…

… which signifies that they offer a potential threat to the leading dedicated aggs. and brokers

Only a minority of aggregators and brokers are definitely trusted by more than 5% of consumers

In terms of all-time on-line utilisation to buy, Confused.com seems poised to overtake the AA…

… and the RAC’s sales performance is well below its profile in terms of awareness and trust

There is no shortage of players hoping to succeed in the on-line aggregation and broking sector

1.0 INTRODUCTION

Research rationale

The Internet insurance market has continued to develop rapidly during the last 12 months…

… with a number of new competitors having emerged in the aggregation and broking space

Research sample

Research structure

Research enhancements

Web-based aggregators and brokers of insurance products

The universe of web-based aggregators and brokers embraces a variety of organisations…

… with some combining genuine brokerage with captive distribution or tied agency models

Who owns whom in web-based aggregation and broking of insurance?

Strengths and weaknesses

The Internet research methodology is characterised by several advantages and drawbacks

Finaccord

Net Metrics and other consumer-focused studies

UK affinity and partnership marketing publications

IPT / IMRS

Errors, omissions and limit of liability

2.0 MARKET ANALYSIS

Introduction

Consumer propensity to purchase via the Internet

Consumers are most likely to have made on-line acquisitions of books or music…

… with almost 60% of respondents having bought insurance via the Internet at least once

Significant year-on-year growth appears to have occurred for cars, clothing and groceries…

… although it is possible that the number of on-line insurance buyers has hit a temporary peak

Propensity to research and purchase insurance products over the Internet

Most consumers who use the Internet to research insurance go on to buy a policy on-line

Types of web site used for researching and purchasing insurance

Opportunities arising from growth in Internet sales are not limited to dedicated insurance firms

Consumers show high willingness to use the web sites of on-line price comparison providers…

… and well over 40% are also likely to use the web sites of traditional affinity partners

Breakdown by type of insurance

On-line sales are most likely to be realised among buyers of pet, travel and motor insurance…

… and least likely for life insurance, critical illness insurance and income replacement insurance

Except for breakdown recovery, on-line sales are usually intermediated in one form or another

Effectiveness of on-line and off-line marketing prompts

In spite of competition from other media, television advertising appears to be the most effective

Few consumers are likely to be influenced by SMS text advertising or on-line pop-up advertising

The effectiveness of event sponsorship as a marketing prompt appears to be increasing

Other sources of information and advice used

Consumers are most likely to consult friends or family members prior to purchasing insurance

… although a variety of other sources are also used by a significant percentage of respondents

Only around 10% of buyers of on-line insurance pay any attention to comments on ‘blogs’

Number of quotes solicited prior to purchasing insurance over the Internet

Close to 90% of consumers still solicit quotes from at least three web sites prior to purchasing…

… although there is some evidence of a shift towards use of a smaller number of web sites

Recognition and usage of providers of general price comparison services

A number of general price comparison providers have begun coverage of insurance products…

… although the nature of this aspect of their service varies significantly from entity to entity

Three general providers of price comparisons are recognised by over 50% of respondents…

… although the degree to which these are utilised to search for insurance is significantly lower

Characteristics of effective web sites for insurance products

Almost 60% of consumers consider a site’s ability to cover the whole mkt. to be very important

Over a quarter of respondents are comfortable with using a site with no telephone support

3.0 COMPETITOR ANALYSIS

Introduction

Consumer awareness of aggregation and broking web sites

The recognition rate of Confused.com is now close to those of the AA and the RAC…

… and has advanced significantly in comparison to the investigation undertaken in 2006…

… a performance matched by a number of the other entities covered by both surveys

Well over half of the 70 web brands covered are not recognised by over 85% of respondents

Consumer trust of aggregation and broking web sites

Several web brands have achieved a significant rise in their trust rating during the last year…

… although the majority lack the financial resources to genuinely win the trust of consumers

Consumer usage to purchase of aggregation and broking web sites

Confused.com is in poll position to overtake the AA in terms of on-line sales…

… with a further ten aggregators and brokers having been used by at least 2% of consumers

The market is characterised by a breakaway pack and the vast majority of ‘stragglers’

Insureandgo’s score for utilisation is much higher than its rating for awareness would suggest

The AA’s rating for trust is bolstered by the fact that breakdown recovery is its core business

More resps. bought through Confused.com in the last year than in any previous time frame

While Confused.com is consolidating its leadership position in the aggregation market…

… it does not appear that this sector has been subject to consolidation during the last year

4.0 AGGREGATOR AND BROKER PROFILES

Introduction

4.1 17to40 (www.17to40.co.uk)

4.2 4YoungDrivers (www.4youngdrivers.co.uk)

4.3 AA (www.theaa.com)

4.4 AdviceOnline (www.adviceonline.co.uk)

4.5 A-Plan (www.aplan.co.uk)

4.6 Auto Direct (www.autodirectinsuranceservices.co.uk)

4.7 AWD Moneyextra (www.moneyextra.com)

4.8 Bell (www.bell.co.uk)

4.9 British Insurance (www.britishinsurance.com)

4.10 BUDGET (www.budgetinsurance.com)

4.11 COMPAREtheMARKET.com (www.comparethemarket.com)

4.12 Confused.com (www.confused.com)

4.13 CoverSave (www.coversave.co.uk)

4.14 Diamond (www.diamond.co.uk)

4.15 Direct Choice (www.directchoice.co.uk)

4.16 Direct Life & Pension Services (www.payingtoomuch.com)

4.17 Easy Quote (www.easy-quote.co.uk)

4.18 EasyCover (www.easycover.com)

4.19 eCar (www.ecarinsurance.co.uk)

4.20 EINSURED (www.einsured.co.uk)

4.21 elephant.co.uk (www.elephant.co.uk)

4.22 Endsleigh (www.endsleigh.co.uk)

4.23 Express Insurance (www.expressinsurance.co.uk)

4.24 First Insurance (www.first.co.uk)

4.25 Girl Motor (www.girlmotor.com)

4.26 Goodinvestor.com (www.goodinvestor.com)

4.27 insurance.co.uk (www.insurance.co.uk)

4.28 Insurancewide.com (www.insurancewide.com)

4.29 insure (www.insure.co.uk)

4.30 Insureandgo (www.insureandgo.com)

4.31 InsureYourMotor.co.uk (www.insureyourmotor.co.uk)

4.32 Interactive Investor (www.iii.co.uk)

4.33 Its4me (www.its4me.co.uk)

4.34 Lady Insure (www.ladyinsure.co.uk)

4.35 Ladybird Insurance (www.ladybirdinsurance.co.uk)

4.36 Life Brokers (www.lifebrokers.co.uk)

4.37 Life Cover Extra (www.lifecoverextra.com)

4.38 Life Cover Made Easy (www.lifecovermadeeasy.co.uk)

4.39 LifeCushion (www.lifecushion.co.uk)

4.40 LifeSaver Direct (www.lifesaveronline.co.uk)

4.41 LocalBroker (www.localbroker.co.uk)

4.42 masterquote (www.masterquote.co.uk)

4.43 Missmotorquote (www.missmotorquote.co.uk)

4.44 MoneyExpert (www.moneyexpert.com)

4.45 Moneynet (www.moneynet.co.uk)

4.46 Moneyquest (www.moneyquest.co.uk)

4.47 Moneysupermarket.com (www.moneysupermarket.com)

4.48 Moneyworld (www.moneyworld.com)

4.49 Motor Direct (www.motordirect.co.uk)

4.50 MotorQuoteDirect (www.motorquotedirect.co.uk)

4.51 MRL Insurance Direct (www.mrlinsurance.co.uk)

4.52 Only Finance (www.onlyfinance.com)

4.53 Open + Direct (www.openandirect.com)

4.54 Peoples Choice (www.peopleschoice.co.uk)

4.55 Q4 Insure (www.q4.com)

4.56 Quick Car Quote (www.quickcarquote.co.uk)

4.57 QuoteA (www.quotea.co.uk)

4.58 Quoteline Direct (www.quotelinedirect.co.uk)

4.59 Quotezone (www.quotezone.co.uk)

4.60 RAC (www.rac.co.uk)

4.61 Screentrade (www.screentrade.co.uk)

4.62 swiftcover.com (www.swiftcover.com)

4.63 Swinton (www.swinton.co.uk)

4.64 The Insurance Centre (www.theinsurancecentre.co.uk)

4.65 The Motley Fool (www.fool.co.uk)

4.66 The Thrifty Scot (www.thriftyscot.co.uk)

4.67 theidol.com (www.theidol.com)

4.68 Unravelit (www.unravelit.com)

4.69 webmoney (www.webmoney.co.uk)

4.70 yesinsurance.co.uk (www.yesinsurance.co.uk)

GRAPHICS / TABLES

Summary of on-line aggregation and broking of insurance in France, Germany, Italy and Spain, Q1 2007

Sample breakdown by age group, household income band and geographical location - insurance questions

Sample breakdown by age group, household income band and geographical location - entire survey

Aggregators and brokers of insurance covered for the first time in the Q1 2007 research

Who owns whom in web-based aggregation and broking of insurance in the UK?

Who owns whom in web-based aggregation and broking of insurance in the UK? (continued)

Who owns whom in on-line provision of general price comparisons in the UK?

Consumer propensity to purchase assorted goods and services via the Internet, Q1 2007

Cons. prop. to purchase assorted goods and services via the Internet, Q1 2006 and Q1 2007 comp. (data)

Consumer prop. to research and purchase insu. products over the Internet, Q1 2006 and Q1 2007 comp.

Types of site used for res. and purch. ins., inc. web sites of orgs. for which dist. of ins. is a sec. act., Q1 2007

Tps. of site used for res. and purch. ins., inc. web sites of orgs. for wh. dist. of ins. is a sec. act., Q1 2007 (data)

Use of on-line and off-line channels for purchasing assorted insurance policies, Q1 2007

Use of on-line and off-line channels for purchasing assorted insurance policies, Q1 2007 (data)

Breakdown of on-line channels by type of web site used for purchasing assorted insurance policies, Q1 2007

Breakdown of on-line channels by type of web site used for purchasing assorted ins. policies, Q1 2007 (data)

Effect. of on-line and off-line mktg. prompts as a means of persuading custs. to visit part. web sites, Q1 2007

Effect. of mktg. prompts as a means of pers. custs. to visit part. web sites, Q1 2006 and Q1 2007 comp. (data)

Other sources of information and advice used prior to purchasing insurance products, Q1 2007

Other sources of information and advice used prior to purchasing insurance products, Q1 2007 (data)

Number of quotes solicited by cons. prior to purchasing ins. over the Internet, Q1 2006 and Q1 2007 comp.

Number of quotes solicited by cons. prior to purch. ins. over the Internet, Q1 2006 and Q1 2007 comp. (data)

Recognition and usage of on-line providers of general price comparison services, Q1 2007

Recognition and usage of on-line providers of general price comparison services, Q1 2007 (data)

Imp. of web site characteristics in pers. custs. to res. and / or purch. ins. through a part. web site, Q1 2007

Imp. of web site characts. in pers. custs. to res. and / or purch. ins. through a part. web site, Q1 2007 (data)

Ranking of web sites of aggregators and brokers of insurance by overall consumer awareness, Q1 2007

Ranking of web sites of aggregators and brokers of ins. by overall consumer awareness, Q1 2007 (cont.)

Ranking of web sites of aggregators and brokers of insurance by consumer trust, Q1 2007

Ranking of web sites of aggregators and brokers of insurance by consumer trust, Q1 2007 (continued)

Ranking of web sites of aggregators and brokers of insurance by consumer usage to purchase, Q1 2007

Ranking of web sites of aggregators and brokers of ins. by consumer usage to purchase, Q1 2007 (cont.)

Correlation between consumer awareness and consumer trust of web sites of aggs. and brokers of insurance

Correlation between cons. awareness and cons. usage to purchase of web sites of aggs. and brokers of ins.

Correlation between cons. trust and cons. usage to purchase of web sites of aggs. and brokers of insurance

Comparison of recent and historic usage to purchase of web sites of aggs. and brokers of insurance (1)

Comparison of recent and historic usage to purchase of web sites of aggs. and brokers of insurance (2)

Consumer awareness, trust and usage to purchase of the www.17to40.co.uk web site

Consumer awareness, trust and usage to purchase of the www.4youngdrivers.co.uk web site

Consumer awareness, trust and usage to purchase of the www.theaa.com web site

Consumer awareness, trust and usage to purchase of the www.adviceonline.co.uk web site

Consumer awareness, trust and usage to purchase of the www.aplan.co.uk web site

Consumer awareness, trust and usage to purchase of the www.autodirectinsuranceservices.co.uk web site

Consumer awareness, trust and usage to purchase of the www.moneyextra.com web site

Consumer awareness, trust and usage to purchase of the www.bell.co.uk web site

Consumer awareness, trust and usage to purchase of the www.britishinsurance.com web site

Consumer awareness, trust and usage to purchase of the www.budgetinsurance.com web site

Consumer awareness, trust and usage to purchase of the www.comparethemarket.com web site

Consumer awareness, trust and usage to purchase of the www.confused.com web site

Consumer awareness, trust and usage to purchase of the www.coversave.co.uk web site

Consumer awareness, trust and usage to purchase of the www.diamond.co.uk web site

Consumer awareness, trust and usage to purchase of the www.directchoice.co.uk web site

Consumer awareness, trust and usage to purchase of the www.payingtoomuch.com web site

Consumer awareness, trust and usage to purchase of the www.easy-quote.co.uk web site

Consumer awareness, trust and usage to purchase of the www.easycover.com web site

Consumer awareness, trust and usage to purchase of the www.ecarinsurance.co.uk web site

Consumer awareness, trust and usage to purchase of the www.einsured.co.uk web site

Consumer awareness, trust and usage to purchase of the www.elephant.co.uk web site

Consumer awareness, trust and usage to purchase of the www.endsleigh.co.uk web site

Consumer awareness, trust and usage to purchase of the www.expressinsurance.co.uk web site

Consumer awareness, trust and usage to purchase of the www.first.co.uk web site

Consumer awareness, trust and usage to purchase of the www.girlmotor.com web site

Consumer awareness, trust and usage to purchase of the www.goodinvestor.com web site

Consumer awareness, trust and usage to purchase of the www.insurance.co.uk web site

Consumer awareness, trust and usage to purchase of the www.insurancewide.com web site

Consumer awareness, trust and usage to purchase of the www.insure.co.uk web site

Consumer awareness, trust and usage to purchase of the www.insureandgo.com web site

Consumer awareness, trust and usage to purchase of the www.insureyourmotor.co.uk web site

Consumer awareness, trust and usage to purchase of the www.iii.co.uk web site

Consumer awareness, trust and usage to purchase of the www.its4me.co.uk web site

Consumer awareness, trust and usage to purchase of the www.ladyinsure.co.uk web site

Consumer awareness, trust and usage to purchase of the www.ladybirdinsurance.co.uk web site

Consumer awareness, trust and usage to purchase of the www.lifebrokers.co.uk web site

Consumer awareness, trust and usage to purchase of the www.lifecoverextra.com web site

Consumer awareness, trust and usage to purchase of the www.lifecovermadeeasy.co.uk web site

Consumer awareness, trust and usage to purchase of the www.lifecushion.co.uk web site

Consumer awareness, trust and usage to purchase of the www.lifesaveronline.co.uk web site

Consumer awareness, trust and usage to purchase of the www.localbroker.co.uk web site

Consumer awareness, trust and usage to purchase of the www.masterquote.co.uk web site

Consumer awareness, trust and usage to purchase of the www.missmotorquote.co.uk web site

Consumer awareness, trust and usage to purchase of the www.moneyexpert.com web site

Consumer awareness, trust and usage to purchase of the www.moneynet.co.uk web site

Consumer awareness, trust and usage to purchase of the www.moneyquest.co.uk web site

Consumer awareness, trust and usage to purchase of the www.moneysupermarket.com web site

Consumer awareness, trust and usage to purchase of the www.moneyworld.com web site

Consumer awareness, trust and usage to purchase of the www.motordirect.co.uk web site

Consumer awareness, trust and usage to purchase of the www.motorquotedirect.co.uk web site

Consumer awareness, trust and usage to purchase of the www.mrlinsurance.co.uk web site

Consumer awareness, trust and usage to purchase of the www.onlyfinance.com web site

Consumer awareness, trust and usage to purchase of the www.openandirect.com web site

Consumer awareness, trust and usage to purchase of the www.peopleschoice.co.uk web site

Consumer awareness, trust and usage to purchase of the www.q4.com web site

Consumer awareness, trust and usage to purchase of the www.quickcarquote.co.uk web site

Consumer awareness, trust and usage to purchase of the www.quotea.co.uk web site

Consumer awareness, trust and usage to purchase of the www.quotelinedirect.co.uk web site

Consumer awareness, trust and usage to purchase of the www.quotezone.co.uk web site

Consumer awareness, trust and usage to purchase of the www.rac.co.uk web site

Consumer awareness, trust and usage to purchase of the www.screentrade.co.uk web site

Consumer awareness, trust and usage to purchase of the www.swiftcover.com web site

Consumer awareness, trust and usage to purchase of the www.swinton.co.uk web site

Consumer awareness, trust and usage to purchase of the www.theinsurancecentre.co.uk web site

Consumer awareness, trust and usage to purchase of the www.fool.co.uk web site

Consumer awareness, trust and usage to purchase of the www.thriftyscot.co.uk web site

Consumer awareness, trust and usage to purchase of the www.theidol.com web site

Consumer awareness, trust and usage to purchase of the www.unravelit.com web site

Consumer awareness, trust and usage to purchase of the www.webmoney.co.uk web site

Consumer awareness, trust and usage to purchase of the www.yesinsurance.co.uk web site

Abstract

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