With signs pointing to a soft market, questions
abound about what will now drive a customer to use an aggregator to switch insurer. As the price comparison evolution continues apace, does maturity mean uncertainty? And what is the perfect market scenario for a price comparison site? asks Tom Cooper, Executive Director, iGO4
In a hard market, consumers see their premiums increase, and are drawn to aggregators to try to secure a better deal at renewal. In a soft market, consumers will use them to search for bargains. But somewhere flat in the middle does not drive traffic or business. With renewal prices similar to last year’s premium, or last month’s for instalment payers, consumers have no real appetite or incentive to put their details through their aggregator again – even though this is now a straightforward process.
Are consumers likely to change if the price they are presented with is 1p cheaper than their current provider? Assuming not, here’s another question: where is the tipping point? How much does brand and the past year’s experience count, particularly when the consumer has been through the claims process? In addition, people are changing their vehicles less frequently and not necessarily looking to buy new. Between 2008 and 2011, half a million fewer new vehicles were being bought each year, with no sign of a reversal. The average age of used cars being sold has gone up to just over seven years old from 6.5.
If you wish to read more please view the Post Magazine Article
*Taken from the Post Magazine April 2012