Aggregation Metrics: Consumer Approaches to Insurance Comparison Sites in Europe
Use of aggregators to buy motor and household insurance is most advanced in the UK but is clearly now growing in France, Germany, Italy, Poland and Spain
Aggregators and online comparison sites are the fastest-growing distribution channel for motor and household insurance in Europe while online purchases have generally grown rapidly across the continent, according to new research from Finaccord.
Finaccord's research, based on surveys of consumers in six European countries - namely, France, Germany, Italy, Poland, Spain and the UK - shows that overall, online channels of acquisition have demonstrated strong growth, increasing in five of the six countries researched. As a combined average for consumers switching a motor or household insurance policy or buying one for the first time, online channels accounted for an average of 42.3% of transactions in 2012, compared to 35.4% in 2008. The UK claimed the largest share of online purchases, with 69.0% of new and switched motor and household policies acquired online in 2012; France showed the lowest levels of online purchases, at 25.2% in the same year. “All the countries we examined showed clear and robust growth in the use of online methods to purchase insurance,” said Edward Wilford, Consultant at Finaccord. “In both countries in which consumers had previously shown a strong preference for online channels and in countries in which consumers had previously been less inclined to go online for insurance products, there is an increasing trend for buying cover via the internet.”
This fits in with information regarding consumer attitudes towards online tools both to research and purchase insurance products online. Across the six countries featured in this report, 23.2% of respondents stated that they never research insurance online, just above the proportion that always did so at 19.3% Turning to actual purchases, an average of 45.3% of respondents reported that they never bought insurance online compared to 12.3% that they always did so. Again, respondents in the UK were far more likely to use the internet for these purposes than those in other countries, with as many as 32.4% reporting that they always researched insurance online and 24.2% saying that they always bought online. In contrast, France had the lowest proportion of consumers willing to go online in this way, as only 2.8% of respondents said that they always used the internet to purchase insurance, while 66.8% of respondents in France stated that they never bought online.
The rise in online channels of acquisition is simultaneous to, and probably driven in part by, the rise in the use of online insurance aggregators and comparison sites. As an average across all six countries, consumers buying new coverage or switching providers for existing motor or household policies used an aggregator 20.3% of the time in 2012, compared to 5.9% for policies purchased in all previous years combined. For the UK, the 2012 figure was 30.3%, the highest of the six countries; as with online channels in general, France had the lowest rate of aggregator use in 2012, at 11.2%. However, this was still more than three times the figure recorded for purchases in all previous years combined in France, which was 3.1%. As such, the evidence of the research is not only that online acquisition of insurance is generally increasing but also that use of aggregators is on the rise.
The correlation between the use of online channels and the use of aggregators extends to another facet of the market: the comparative rate of churn (i.e. the percentage of consumers switching provider or buying a policy for the first time among all insured consumers). While average churn rates were generally fairly steady between 2008 and 2012, there is still a meaningful correlation between the online channel use, aggregator use and market volatility. “The UK had the most consumers buying online, the most using aggregators and experienced the highest churn rates, with 39.3% of consumers switching their motor cover in 2012, while 35.1% changed their provider of household insurance in the same year,” explained Edward Wilford. “By contrast, France had the fewest consumers buying online, the lowest percentage of aggregator use, and experienced the least market volatility, with only 14.2% switching insurers for motor insurance and 16.8% for household insurance during 2012.”
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