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UK Insurance Aggregators 2019

UK Insurance Aggregators 2019

Summary

PCWs have given consumers more control over the products they purchase and the brands in which they invest. Aggregators can stimulate competition between firms by helping to remove the barriers to market access and encouraging new entrants, which is ultimately good for consumers. On the flipside, the commoditization of the products sold on aggregators has arguably created a race to the bottom in terms of the quality of cover provided. This has also encouraged different behavior in the industry, which is not always favorable for consumers. The aggregators’ need to cram so much information on the page has often led to confusion over what exactly the customer has bought, especially in less mature, slightly more complex markets like pet insurance.Comparing policies independently would be extremely time-consuming, whereas comparison sites are supposed to be a convenient and efficient tool any customer can access, even just for research purposes prior to a purchase (although as will be discussed, issues remain in terms of ensuring a true and transparent view of prices). However, due to a lack of trust in the results, many consumers are not content with using just one site to compare prices, even if the same brands are almost universally available across the largest four comparison sites (Compare the Market, MoneySuperMarket, Confused.com, and GoCompare). This paves the way for more intuitive sites that could compare the aggregators, for example, or offer more of an advisory service.The percentage of consumers conducting research on price comparison websites (PCWs) at renewal increased in motor and pet lines, while home and travel insurance saw declines. Motor insurance, the biggest market for PCWs, posted a rise of 4.5 percentage points (pp). This trend was replicated in the number of purchases made through the channel, with motor and pet also seeing more purchases. The UK Insurance Aggregators 2019, report explores the ever-changing consumer purchasing behavior through price comparison sites. It identifies what is most influential to customers when selecting a policy through this channel and reveals the brand strategies of the four leading sites. Their distinct approaches to advertising are also highlighted, as well as the key factors that will influence the market over the coming years, including regulation and new technology.

Scope

  • The motor insurance product has the strongest presence on comparison sites, with over two thirds of consumers purchasing policies through them.
  • All four main aggregators reported improved year-on-year financial performances.
  • Advertising spend is high for three of the four leading aggregators, with Confused.com leading the way as it continues to improve its market position in the individual product lines.
Reasons to buy
  • Adapt your distribution strategy to ensure it still meets customer purchasing needs and behaviors.
  • Ensure you remain competitive as new innovations revolutionize the consumer purchasing journey.
  • Be informed of how new technologies could impact the aggregator channel over the next few years.
  • Learn about the differences in pricing between the top four comparison sites.


  • Executive Summary
    • Aggregator web traffic picks up as premiums soar
    • Key findings
    • Critical success factors
  • Aggregator Market
    • Aggregators' promise to save consumers time and money holds strong appeal
    • The products generating more traffic for research have seen more sales
      • Table Figure 1: Consumers are most likely to conduct motor insurance research on PCWs
      • Table Figure 2: The PCW channel is strongest for motor insurance after encouraging growth in 2018
      • Table Figure 3: Conversion from research to sales fell in three of the four categories in 2018
    • Aggregators' strong financial results reflect consumer behavior
      • Table Figure 4: Switching rates increased across the home, motor, and pet lines
      • Table Figure 5: Approximately half of consumers who use PCWs switch at the end of the policy in three out of four product lines
    • Price is essential, but consumers do look beyond the cheapest policy
      • Table Figure 6: Consumers look beyond the very cheapest policy
    • The Insurance Distribution Directive aims to increase clarity
    • The FCA is eyeing tougher enforcement of renewal transparency after issuing repeated warnings
    • Startups tweaking the aggregator model could pose a threat to the established four
      • Table Figure 7: Honcho's app looks to simplify PCWs for consumers
  • Comparison Sites by Channel
    • Motor
      • Table Figure 8: MoneySuperMarket benefited from repeat business, while Compare the Market's toys and rewards continued to work
      • Table Figure 9: Average motor premiums declined in the second half of 2018
      • Average price varies considerably across the leading aggregators
        • Table Figure 10: Confused.com has a large range of cheap options, giving it the lowest average premium
      • IPT remains at 12.0% following the 2017 increase
      • The Civil Liabilities Bill should keep motor premium growth low
    • Home
      • Table Figure 11: Compare the Market benefits from repeat business in the household market
      • Table Figure 12: Household premiums fluctuated throughout the review period, picking up in Q4 2018
      • Clarity remains an issue in the home sector
      • MoneySuperMarket has the best-value home insurance policies
        • Table Figure 13: Cheaper prices were seen across the top 10, while MoneySuperMarket has the lowest household average price
    • Travel
      • Table Figure 14: GoCompare has a strong presence on search engines but struggles to compete on repeat business
      • Consumers are offered a wide range of affordable travel policies
        • Table Figure 15: Consumers are still offered a wide range of cheap travel insurance policies
    • Pet
      • Soaring premiums are sending consumers to aggregators
        • Table Figure 16: MoneySuperMarket stands out for the cheapest prices in the pet market
      • Clarity remains a problem in the pet sector
      • Consumers are shifting towards lifetime policies
      • Pet insurance policies can vary greatly on price, even among the cheapest policies
        • Table Figure 17: Confused.com continues to offer the cheapest lifetime pet insurance policies
  • Comparison Site Profiles
    • Overall
      • Table Figure 18: Compare the Market maintained its strong lead in all four product lines
      • Table Figure 19: Compare the Market's position as market leader was boosted by rewards and customer familiarity
      • Confused.com offers the cheapest premiums
    • Compare the Market
      • Further findings released in the CMA's investigation into Compare the Market
      • Compare the Market's parent group reported record revenue and profit
    • MoneySuperMarket
      • MoneySuperMarket enjoyed a strong start to 2018
      • MoneySuperMarket leads the way in mobile apps
    • Confused.com
      • Confused.com saw revenue and profits rise after declines in 2017
    • GoCompare
      • Positive financial performance for GoCompare
      • GoCompare looks towards fintech
  • Marketing
    • Overall
      • Table Figure 20: Confused.com's total spend plummeted, but it remained the top aggregator advertiser
      • Table Figure 21: Confused.com focused on motor insurance in 2018
    • Confused.com dominated advertising spend
      • Table Figure 22: Confused.com focused its 2018 advertising on TV and online channels
    • MoneySuperMarket shifted its focus back to TV advertising
      • Table Figure 23: MoneySuperMarket spread out its smaller marketing budget, but still favors TV
    • GoCompare's advertising spend continued to decline
      • Table Figure 24: GoCompare remains heavily reliant upon TV for marketing
    • Compare the Market's advertising spend remained below £1m
      • Table Figure 25: Compare the Market has spent very little on advertising since 2016
  • Appendix
    • Abbreviations and acronyms
    • Definitions
      • Home insurance
      • Pet insurance
    • Methodology
      • GlobalData's 2017 and 2018 General Insurance Consumer Surveys
    • Bibliography
    • Further reading
    • About GlobalData
      • Table Figure 26:About GlobalData

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