More than half of the 400 insurers surveyed globally in a recent Accenture (NYSE: ACN) 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 UK –but only 58 percent of insurers in the US – are considering setting up their own aggregator sites
In the UK, aggregators account for 60 to 70 percent of new business premiums in the private automobile insurance market alone; in the US, 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 UK and Ireland. "Insurance customers expect a sophisticated online experience that provides real-time, accurate quotes, price transparency and competiveness. 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, 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."
Accenture Research surveyed 414 senior insurance executives across Europe, the Americas and Asia Pacific to determine how they are transforming their distribution models to increase customer engagement and meet customer expectations. The surveys, which were conducted online, took place between June and September 2015. Respondents were mostly C-level executives and directors responsible for sales, distribution and marketing and digital strategy at personal lines, small commercial lines, life and multi-line insurance companies with at least US$1 billion in annual premium volumes.
Laura Collins, Editorial Management
Published: Monday, January 18, 2016
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