In the US, there has been a new development in the online insurance space, namely price comparison sites – Google Compare being clearly the largest and most vocal in this arena. There is also Ccompare.com, and I would imagine a few more by the end of the year.
With this has come the backlash from the broker marketplace, and more and more brokers feel that their territory is being eroded. And at first look, they could be right.
But let me let you all in on a secret. Insurance price comparison did not start its life in the US in 2014. It started in the UK, in 1997. The UK price comparison market is very, very well established, with there currently being five major players in the space – Confused, MoneySuperMarket, CompareTheMarket, GoCompare and Google Compare.
The broker market made the same noises here in the UK as those now being made in the US, but (and there is a but) the broker market survives and continues to thrive.
Comparison sites may be commoditizing insurance and removing brand loyalty, but brokers now have a great opportunity to reach out to potential customers to explain why people should use a broker.
The UK has a website sponsored by the UK Finance and Insurance regulatory (the FCA) called the Money Advice Service, and they publish guides such as this.
Posting articles explaining the benefits of having the most appropriate insurance getting the best aftercare service, going local, etc. highlights why brokers are worth their weight in gold. You have to help customers understand why cheaper isn’t always better.
This is something not many brokers did in the UK for a long time, but now they are starting to see the advantages of encouraging their customers to stay local and highlighting the benefits of using their brokerage.
Can you offer special deals? In the UK, insurers offer their brokers price-match guarantees within a 25-mile radius of their offices. Insurers still want a strong broker market, as it will be better for them and easier to administer business. So why not ask, what they are doing to help you?
Sleeping with the enemy?
There are also a number of ways brokers can work with price comparison sites. In the UK, the more technologically nimble have managed to secure deals with these sites. Not by displaying their rates, but by offering to fulfill insurance that doesn’t fit the in the usual box. Inevitably, there will be quotes that simply cannot be returned in an online way, or that are too expensive, so brokers can work with these price comparison sites in their area to fulfill customer need.
After all, a price comparison site is only good for people if they can deliver on their promise of low cost and adequate insurance. Sometimes that might mean referrals.
Could that be you?
Additionally, there will come a time where these sites will realize they have much more traffic in areas where they can’t currently compare online, so they might create directories of specialists or niche insurance offers and this can include brokers. Checkout MoneySuperMarket’s landlord insurance page, for example.
There is great exposure and traffic to be had from these kind of placements.
As you can see, there could very well be good opportunities here. Don’t simply ignore price comparison as the enemy; look at these sites frequently, and see if there are opportunities and developments you can exploit.
There are a number of ways to grow your business in this time. Highlight and engage with existing and new customers about why they should choose a broker. Explain the downsides to price comparison. Be vocal. Speak to your carriers and see if they have anything you can offer to help compete.
Check out these sites and look for opportunities you can exploit. The brokers that did that in the UK have prospered.
This price comparison development doesn’t mean the death knell for the broker industry, even thought it may feel like it. I hope this article gives you some ideas to look at price comparison as an opportunity – if nothing else, it gives you a reason to talk to your clients.