The summer has seen direct writers fight back, coming out ahead of brokers 60%of the time. Tom Cooper asks why and considers the current aggregator trends.
The climb in average price of the most competitive quote on the four major motor price comparison sites has continued through to the summer, with rates still rising in hefty chunks — but the rate of increase has started to slow (see table below). Indeed, with the market returning a 119% result for 2009 it will not need to shift much further to return to profit, assuming expenses are being kept under control as well as claims experience and inflation being reasonably managed. Alongside continued rate improvement, the most striking change has been the strengthening position of direct writers. In this latest Igo4 watch, they came out top 60% of the time, having always run neck and neck with the broker market in the past.
In fact,we’ve seen broker-based insurers feeding in significant increases throughout 2010 and certainly higher than our index. These insurers have been able to push through much needed rate rises while simultaneously growing volumes, as capacity in the motor market shrinks and their competitors narrow their underwriting footprints or, in some cases, withdraw altogether. So, with insurers filling their capacity gap through the rebroking of existing business, it is the brokers who face a more difficult challenge in acquiring new customers.
If you wish to read more please view the Post Magazine Artile
*Taken from the Post Magazine July 2010