Aggregators in key markets around the world have proven that they can change the way people think about buying insurance and change the economics of insurance distribution. Some insurers have ridden the aggregator wave, while others see the rise of aggregators as a threat. They have tended to respond to aggregators in one of four ways:
Some insurers have refused outright to work with aggregators, even making their lack of presence on aggregators’ sites a selling point. These insurers often have large quantities of direct sales and large investments in brand building that they feel they need to protect. They may believe that competing on brand attributes and price can enable them to continue selling at profitable volume levels.
An increasing number of carriers worldwide have accepted aggregators as an additional distribution channel and have made their products available through them. In cooperating with aggregators, carriers may be taking another course of action to support and protect their own direct sales. They may also have confidence that their ability to compete on price can generate profitable volume from the aggregator channel.
Another course of action by carriers involves “crowding out” competitors, either by offering multiple brands, or by offering multiple quotes on a single brand, to achieve a dominant position on the aggregators’ all-important first page.
Some insurance carriers have chosen to pursue a dual-path strategy, either by setting up an aggregator, forming a close alliance with an existing aggregator or making strategic investments in established aggregators.
In Accenture’s view, insurers should regard aggregators as an additional distribution channel and consider strategies for maximizing the value of the channel. For new aggregator markets, the key lesson from the UK is that carriers and aggregators that work in concert can create a mutually beneficial value proposition that enables the customer with both transparency and high quality products.
Insurers that choose to engage with aggregators may do so in one of two ways:
Integrate and optimize
Insurers can pursue a digital optimization strategy designed to make the most of both their own online presence and their presence on the aggregators’ sites. This may involve closer integration of the carrier and aggregator sites, so that the customer experience is comparable in both locations, or providing a richer user experience for aggregator customers.
Carriers could also employ multi-variant testing of the aggregator site to maximize both the rate of conversion and the attractiveness of customers obtained this way.
Develop a tailored aggregator value proposition
Insurers can “play to win” in the aggregator channel by competing in areas outside pricing. They can make exclusive offers, or provide new niche products involving telematics or rewards for “green” behavior. They can take alternative marketing approaches by using vouchers, cash rebates, or promotional gifts.