By partnering with an insurtech, aggregator Comparethemarket.com will expose a wider range of customers to personal insurance products that are not only more price competitive, but also tend to be more flexible, with customers having the option to cancel or pause their premium at any time, as well as being fully digital, according to analytics company GlobalData. This means that insurers will need to differentiate their products beyond the price point to reach new customers.
Price comparison websites (PCW) are an important distribution channel for the UK personal insurance market. GlobalData’s 2020 UK Insurance Consumer Survey found that 24.8 per cent of customers purchased home contents insurance from a PCW. The survey also found that 66.4 per cent of consumers purchased contents insurance from a PCW because they had used the site before. While this highlights PCWs’ ability to attract returning customers and cross-selling opportunities, it also flags that PCWs are reliant on customers that switch insurance providers year-on-year.
New regulations might change the way insurers have to adapt
Jazmin Chong, Insurance Analyst at GlobalData, commented: “The [UK’s] Financial Conduct Authority (FCA) is set to implement a new regulation by the end of 2021, which will decrease incentives for customers to switch, as insurers will no longer be able to charge more to existing customers than new ones. The change in regulation is expected to have the biggest implications for PCWs as their distribution is heavily reliant on consumers’ switching behaviours. GlobalData predicts that PCWs would have to innovate their business models, delivering benefits to consumers that go beyond price to attract customers.
“Comparethemarket.com’s partnership with Getsafe opens up the possibility for customers to have access to more customisable polices due to the personalisation feature, which allows the policy to compete on price. For example, Getsafe customers can insure specific contents that are important to them, rather than having to pay a flat premium fee with a cover level that may not be applicable to their own needs. Additionally, Getsafe is a fully digital platform that also gives customers the flexibility to cancel their policy at any time.
“With the addition of Getsafe being listed on Comparethemarket.com, the site may look to partner with additional insurtechs. This, combined with the FCA’s regulation change and PCWs embracing insurtechs on their sites, will make it clear to insurers that they will need to differentiate their products beyond the price point to reach new customers.”