Digital Insurance In Action

Moneysupermarket.com’s aims to save households money by providing choice, transparency and convenience

In response to a growing online market and the need to provide greater transparency and choice, the last decade has seen an increasing number of aggregator platforms launching in the UK market, particularly in the personal lines space. Moneysupermarket.com was one of the first aggregators to launch in the UK in 1999. It launched as a “ consumer-focused internet business offering consumers the opportunity to search for and compare mortgages online using a database of rates created by the intermediary business”. The insurance arm launched later in 2003 and the business listed on the London Stock Exchange in 2007. Since then, it has gone on to become one of the largest and most successful aggregators in the UK and has a market capitalisation of >US$2 billion.

Moneysupermarket’s mission is simple: “Our aim is to save 10,000,000 households more than GBP 200 each in 2015”. Its business model allows customers to easily compare a number of financial products, including insurance, as quickly and simply as possible so that they can make an informed choice about which product to buy.  Its website gives customers easy and instant access to a range of insurance solutions, tailored specifically to their insurance needs and through a slick user experience. For insurance, clients complete a single form and obtain quotes from different insurers which enable customers to do a comparative analysis and ultimately select and purchase a policy/product.  As the quotation is stored in the insurer’s server, the customers can also return at a later date to complete the purchase.

Moneysupermarket.com is also renown for its marketing, which is often humorous, “tongue and cheek” and bold. One of its ads earlier this year was called the “Epic Strut” and featured Sharon Osbourne and got millions of views on YouTube.  It’s latest ad launched in July 2015 is proving just as popular – you can view this below.

[youtube height=”HEIGHT” width=”WIDTH”]https://www.youtube.com/watch?v=X-5AxFtf_n4[/youtube]

This light or virtual insurance services business model enhances the customers purchase experience while facilitating the sales process through an easy click-and-buy process on the aggregator platform.

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In the UK, the online aggregator model has created rapidly growing, highly profitable businesses and has had a huge influence in personal lines insurance, particularly within the car insurance market. Various benefits of the aggregator model include:

1. From a consumer perspective – ease, simplicity, greater choice and lower prices are obvious benefits. The customer can enter in their criteria once and in return is able to see the best options very quickly and to purchase on the spot
2. From an insurer’s perspective, aggregator models provide an additional distribution channel, ultimately leading to a greater number of prospects and increased sales at very little additional cost. In effect, the aggregator markets the insurer
3. From the aggregator’s perspective, the model by-passes the traditional ‘heavy’ expenses and costs of a typical insurance company as the cost of servicing the client is borne by the insurer. In addition, an aggregator business is much simpler to set up, in particular operationally, than a traditional insurance business. Although it’s a model built on scale, the lower cost base gives rise to the potential for higher profits

Due to the relatively low barrier to entry, the aggregator concept has been rapidly copied and expanded extensively by competitors like Compare the Market, Confused, Beat that Quote and now Google Compare UK.  Moneysupermarket has managed to capitalise on its early entry advantage and retains a significant share of the aggregator market.  It currently manages three brands under the Moneysupermarket Group and continues to show a positive growth trajectory, despite increasing competition. Interestingly, the Group is also undergoing a large-scale technology transformation to run all three brands on one system.

What we are seeing now are new entrants who are pursuing the model in newer markets such as Asia and the US as a way to reach and serve the needs of the omnipresent digital customer.

What will be interesting to see is whether the model sees as much success in the newer markets where the transition from more traditional insurance models to digital models is an on-going evolution.  The early signs and indications from companies such as Comaprexpress.com (Singapore), AturDuit (Malaysia and Indonesia) and directasia.com (Singapore) who have built aggregator models are very encouraging.

Moneysupermarket changes the aggregator landscape

Moneysupermarket Website