Motor insurance aggregators – winners and losers

The customer benefits by getting cheap motor insurance.

There is no doubt that the advent of aggregators has done a great deal to educate personal motor customers about price and choice of provider. Research is fairly unanimous in seeing customers as the main beneficiary of the rise of the aggregator. As these chastened times take hold on household budgets, previously loyal customers faced with renewal premium increases may now question the wisdom of staying with their existing insurer. Undoubtedly, aggregator sites will benefit from this trend as consumers look for ways to reduce cover by adjusting product features such as add-ons and additional drivers and potentially trade in cars for lower-cost vehicles.

The industry is the loser

The insurers interviewed are divided on whether aggregators are good or bad for their motor insurance profitability. Given that aggregator sales tend to generate lower levels of cross-selling and up-selling, the overall impact on insurers’ profitability has generally been negative. Aggregators have also provided a vehicle for highlighting weaknesses in insurers’ pricing strategies, which has led to greater rating transparencies now available through most insurers’ direct sale websites.

Renewal rates for aggregator sales are lower when compared to other sources.

In summary, Girlmotor uses aggregators to offer customers cheap motor insurance for women but understands that this business is likely to offer worse renewal rates unless we can keep coming up with the best rates and service on the market.