More than half of the 400 insurers surveyed globally in a recent Accenture study are considering setting up their own aggregator sites – online sites that allow insurers to sell their own and other insurers' products.
The Accenture report – “Coming to Terms with Insurance Aggregators: Global lessons for carriers” – highlights the continued growth of the aggregator model, strategic options for insurers to compete using these channels, and the increased competition from companies in this space, including retailers, technology vendors, and Internet giants.
However, the study did find significant differences by geography, particularly between the United Kingdom and United States. For instance, more than three-quarters (83 percent) of insurers in the U.K. – but only 58 percent of insurers in the U.S. – are considering setting up their own aggregator sites.
In the U.K., aggregators account for 60 to 70 percent of new business premiums in the private automobile insurance market alone; in the U.S., aggregators face market-penetration challenges due to competition by well-established carrier brands with large advertising budgets and the need to comply with state-level regulations.
“The aggregator business model is more aligned with how customers compare and purchase products today than traditional sales channels for insurance,” said Roy Jubraj, a managing director in Accenture's insurance industry practice in the U.K. and Ireland. “Insurance customers expect a sophisticated online experience that provides real-time, accurate quotes, price transparency and competitiveness. Engaging with aggregators can help less-digitally sophisticated insurers optimize their customer experience while also providing a channel for exclusive product offers.”
More than half (58 percent) of insurers surveyed currently work with aggregators under their main brand. While the number of insurers that work with aggregators under a sub-brand is lower, at 43 percent, insurers expect that figure to increase to 53 percent in the next three years.
In considering other strategic options for using aggregator sites, half (51 percent) of insurers surveyed said they are looking into defining low-cost products specifically for aggregators, and more than one-third (35 percent) are considering setting up a new sales structure dedicated to aggregators. Only 13 percent are not considering options with regard to aggregators.
“The aggregator model has the potential to change the economics around how insurers are distributing their products. We expect aggregators to continue to grow in terms of the products they offer and the markets they serve, driven by customers that want options, transparency, and convenience,” said Erik Sandquist, the managing director for Accenture distribution and marketing services in North America. “The continued development of new and existing aggregator ecosystems and improvements to the end-to-end customer experience will also help fuel growth.”
Learn more: www.accenture.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].