UK Insurance Aggregators 2010

Introduction

This comprehensive report provides insight into the market size of aggregator-instigated sales of private motor and home insurance and examines key competitor developments within the market. It also analyses the impact of advertising on the sector and forecasts the future growth of insurance aggregators in the home and motor insurance sectors.
Features and benefits

* Understand the market potential for aggregators* Assist in strategy development to enter the aggregator market* Gain insight into the main trends affecting the aggregator market
Highlights

Aggregator-instigated new business has grown substantially in the recent years. In 2007, sales initiated by aggregators accounted for just 2% of new business in the home insurance market and Datamonitor estimates that this figure has now reached 15%.Competitive pressures continue to intensify in the insurance aggregator market, with increasingly higher marketing spend from competitors fighting for market share
Your key questions answered

* Who are the main competitors in the aggregator space?* How has the aggregator market grown in the recent years?* What are the new trends and new strategies in the aggregator space?
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Executive Summary
Aggregator-instigated sales continue to increase as a proportion of total business
New motor insurance business is distributed mainly via brokers, both directly and through aggregator sites
Home insurance policies sold through insurance aggregators have also increased
Insurance aggregators are now a powerful part of the general insurance distribution landscape
OFT study results: price comparison sites are a useful tool for customers who want to shop around, but more awareness is needed about their limitations
Awareness of price comparison sites among consumers is still growing, expanding the market for aggregators
Only 19% of respondents have never used a price comparison site
Datamonitor FSCI Survey results: focus on home insurance
Fewer respondents used insurance aggregators to look for home insurance than motor insurance
Successful TV advertising defines success for insurance aggregators
Motor insurance sales through insurance aggregators can still increase in the coming years
OVERVIEW
Catalyst
Summary
MARKET CONTEXT
Introduction
Aggregator-instigated sales continue to increase as a proportion of total business
New motor insurance business is distributed mainly via brokers, both directly and through aggregator sites
Home insurance policies sold through insurance aggregators have also increased
Insurance aggregators are now a powerful part of the general insurance distribution landscape
Rising insurance premiums, intense competition, and heightened popularity have resulted in price comparison sites becoming integral to the motor insurance market
Most insurers and brokers feel that they have to sell through price comparison sites if they want to remain competitive
For many insurers, insurance aggregators have become the main, if not the only, distribution channel
Pricing strategies vary across the market
Consumer attitudes are the key factor defining the role of insurance aggregators and how powerful they can become
Media coverage surrounding price comparison sites
Concerns over the use of private data with ongoing studies from Which?
Price comparison websites have been blamed for encouraging car insurance fraud
Are customers buying the products they need?
OFT study provides a balanced overview of price comparison sites
OFT study results: price comparison sites are a useful tool for customers who want to shop around, but more awareness is needed about their limitations
Consumers cited a number of problems they experienced when searching for products via price comparison sites
The OFT report provides a number of conclusions and recommendations
CUSTOMER FOCUS
Awareness of price comparison sites among consumers is still growing, expanding the market for aggregators
Only 19% of respondents have never used a price comparison site
36% of respondents use two comparison sites when searching for products
Most respondents said that price comparison sites have drawbacks
Half of all respondents said that price comparison sites do not list all providers and prefer to go to supplier's site directly to check availability
The most popular insurance products consumer shop for on price comparison sites include motor, home, and travel insurance
Speedy comparisons are the key draw for users of insurance aggregators
Based on the consumer survey results, price comparison sites could improve their service
Investing in a brand can still pay dividends on price comparison websites
The majority of respondents decide not to choose the cheapest product
Datamonitor FSCI Survey results: focusing on motor insurance
Most respondents visited a price comparison site to obtain a quotation for their car insurance
Price comparison sites are most popular among 25–34 year olds and least popular among those aged 65 and over
Responses differed across the socio-economic groups, with groups A and B using price comparison sites most often
Many consumers see price comparison sites mainly as a research tool
Datamonitor FSCI Survey results: focus on home insurance
Fewer respondents used insurance aggregators to look for home insurance than motor insurance
Increasing advertising spend has now become an entry barrier for potential new competitors
Successful TV advertising defines success for insurance aggregators
Gio Compario and the meerkat, examples of old-fashioned TV advertising that works
Confused.com troubled with falling revenues, and Tesco Compare reducing its operations
COMPETITIVE DYNAMICS
Introduction
Brand recognition of insurance aggregators among consumers
Moneysupermarket.com was mentioned by over half of the respondents, giving it the highest brand recognition
Tesco has been trying to enter the insurance aggregators market
Tesco Compare have reduced the scale of their operations
Recent entrants and leavers in the market
Saga's Confident Cover has left the market
Argos Compare recently entered the insurance aggregator market
Confused.com
Confused.com lost market share in 2010 and has been struggling after an unsuccessful TV campaign
Confused.com media spend
Confused.com's daily reach has remained relatively static over the past months
Comparethemarket.com and the meerkat
Comparethemarket.com grew by an estimated 70% in 2010
Comparethemarket.com's advertising spend has increased significantly between 2009 and 2010
TV advertising is the most important advertising tool for Comparethemarket.com
The number of visits to Comparethemarket.com's website increased since 2009
Comparethemarket.com's price comparison site has added clarity for consumers
Gocompare.com and Gio Compario
Achieved profitability with £12m post-tax profit in 2009
Gocompare.com now invests heavily in advertising, aiming to increase its market share
Internet visits to Gocompare.com increased slightly in 2010
Moneysupermarket.com
Increased revenue from insurance by 9.3% between H1 2010 and H1 2009
TV adverts featuring comedian Omid Djalili had a limited effect on revenues
Moneysupermarket.com has substantially higher Internet traffic compared to other insurance aggregators
FUTURE DECODED
Future conditions in the insurance aggregator market
Insurance aggregators can continue to strengthen their position as a key distribution channel for motor and home insurance
Advertising war not sustainable anymore; cash-back offers are likely to become the main differentiator between price comparison sites
Alternative scenarios include a potential revolution in how insurers and brokers use insurance aggregators, including a government-run price comparison system
Future growth in the insurance aggregator market
Motor insurance sales through insurance aggregators could still increase in the coming years
Aggregator-instigated home insurance sales have the potential to grow even more in the coming years
APPENDIX
Definitions
Methodology
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer

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