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Autumn Watch

The last IGO4 price comparison site watch reported quote volumes had started to level out and, in some cases, decline from the highs witnessed in 2012. That trend has continued throughout the summer, though the declines for some sites appear to have steadied, with the total number of quotes generated each month settling between 10 million and 11 million.

Compare the Market has bucked this general trend and surged upwards – buoyed by the public’s affection for meerkat Aleksandr Orlov – resulting in sustained double-digit year-on-year increases in quote volume, and growth in market share to 36% of all quotes generated through aggregators.

Google remains an interesting player in motor. Throughout 2013 it has doubled its quote share, albeit only from 1% to 2%, allowing it to move into the third tier of providers alongside Quote Zone and Tesco Compare, which have a similar market share. Go Compare and Money Supermarket, in particular, now have Google on their radar given their respective volumes derived from paid-for and natural Google search results. It will be interesting to see if Google’s forward momentum continues.

The size of the aggregator market and its share of overall new sales always makes for intriguing debate. When aggregators first started to emerge as a serious distribution option, conversion rates sat at around 10% of total quotes. That figure has now halved, as people visit multiple sites (2.5 on average) and get multiple quotes from each (again 2.5 on average). Around 1.75 million unique quotes are provided on these sites each month, and around 21 million per year, with 6.6 million customers taking out a new policy via an aggregator each year.

The aggregator share of the active market is more subjective. While there are around 30 million insured private cars on the road, a large number of consumers renew their policies without shopping around at all. This will be particularly prevalent in the current soft market, where – until recently – media and consumer perception was one
of increasing rates.

Rates of around 60% are commonly quoted at present. This suggests that around 55% of all of new motor policies written each year in the market originate on a price comparison site, with possibly another 5% starting on a price comparison site before being purchased from a brand directly. This overall 60% figure has been our take on the size of aggregator
share of the active market for some time now, and it seems unlikely to shift much.

If you wish to read more please view the Post Magazine Article

*Taken from the Post Magazine October 2013

Making Changes – Price comparison sites are making changes

Price comparison sites are making changes to the way they operate, embracing telematics and moving into new product lines.

This is the twenty-third IGO4 price comparison watch and, as long ago as 2010, there has been speculation as to when aggregators for private motor would reach maturity in the UK. There were already signs back then that long-established sites were finding it challenging to maintain their incredible growth. Indeed had it not been for the remarkable success of the Compare the Market meerkat, there would have been a decline in this market two years ago.

The reasons for this are complex and not immediately obvious. It is true that each of the major player’s definition of a quote may differ, and indeed always has done, but IGO4’s measure has been consistent since 2008. The general consensus in the mass media has been of rising insurance costs fuelled by uninsured drivers, the compensation culture and profiteering by insurers; all of which will drive a certain consumer mindset. As their renewal approaches, this media stance leads customers to expect a sizeable increase in their premium. On realising that actually it remains within the range of what they might consider reasonable, their desire and enthusiasm to embark on rate comparison is reduced.

Nor is the answer as straight forward as insurers withdrawing from demographic segments that are unprofitable. This could be as a result of the increased use of external data insurers and brokers review before producing a price. This includes the widening use of credit scoring software and identity checks

If you wish to read more please view the Post Magazine Article

*Taken from the Post Magazine April 2013

Making Changes – Price comparison sites are making changes

Price comparison sites are making changes to the way they operate, embracing telematics and moving into new product lines.

This is the twenty-third IGO4 price comparison watch and, as long ago as 2010, there has been speculation as to when aggregators for private motor would reach maturity in the UK. There were already signs back then that long-established sites were finding it challenging to maintain their incredible growth. Indeed had it not been for the remarkable success of the Compare the Market meerkat, there would have been a decline in this market two years ago.

The reasons for this are complex and not immediately obvious. It is true that each of the major player’s definition of a quote may differ, and indeed always has done, but IGO4’s measure has been consistent since 2008. The general consensus in the mass media has been of rising insurance costs fuelled by uninsured drivers, the compensation culture and profiteering by insurers; all of which will drive a certain consumer mindset. As their renewal approaches, this media stance leads customers to expect a sizeable increase in their premium. On realising that actually it remains within the range of what they might consider reasonable, their desire and enthusiasm to embark on rate comparison is reduced.

Nor is the answer as straight forward as insurers withdrawing from demographic segments that are unprofitable. This could be as a result of the increased use of external data insurers and brokers review before producing a price. This includes the widening use of credit scoring software and identity checks

If you wish to read more please view the Post Magazine Article

*Taken from the Post Magazine April 2013

No Compare – Price comparison sites have plateaued on motor

It became clear from the price analysis carried out during the course of 2012 that the impact of gender on pricing declined since the change in legislation was first announced earlier in the year. Many insurers immediately started to narrow the gap between the sexes –particularly older drivers – despite the legislation only coming into effect on 21 December.

The iGO4 price comparison watch compares prices for the same risk details across 1000 quotes so, for the latest quarterly analysis, the effective quote date was set past the gender ruling cut-off date in order to capture and monitor its immediate impact. The results were quite startling – on motor, males have seen almost double-digit falls in some cases from September to December, while the female rate has gone up by 3.4% over the same period. These headline figures do not tell the whole story, however, as females aged under 20 have seen rises of 13% while those over 30 have barely seen prices move upwards at all. Males of all ages – but especially younger drivers – have enjoyed huge reductions in the fourth and final quarter.

So the fear that insurers would use this as an opportunity to merely increase rates across the board has not materialised in what continues to be a soft market. The motor quote basket has also seen shifts for some brands in terms of competitive pricing. Admiral reasserted its position in the final quarter, particularly through its Diamond brand and we also saw Privilege coming to the fore alongside a couple of usual suspects on the direct front in LV and Octagon. Significantly, the ever-rising dominance of price comparison sites in the private car market finally matured and flattened out in 2012.

That said, in the space of just 10 years since their inception, aggregators now generate 10 to 11 million quotes every month and 60% of every new car insurance policy sold. Leading the way and cementing its position in 2012 was Compare the Market with a 32% market share of quotes, followed by Money Supermarket with 27% and Confused and Go Compare jointly in third spot with 18% each. The other 5% is made up of a number of smaller players with Quotezone and Tesco Compare vying for places five and six.

If you wish to read more please view the Post Magazine Article

*Taken from the Post Magazine January 2013