53% of Gross Written Motor Premiums in the UK are via aggregators. The figure for Germany is 36% whilst the Netherlands is far lower at 10%. In all markets aggregator market share is rising except the UK where is has stabilised at 53%. Source McKinsey 

Leading aggregators exploit key strengths: -

  1. Strong Brands
  2. Tight grip of Technology
  3. Customer Loyalty
  4. Favourable agreements with providers

Insurers essentially trade off margin for sales without the high costs of direct acquisition. 

The high margins retained by aggregators,  an adjusted EBITDA of 38.6 percent in 2017  for MoneySuperMarket  are a temptation for insurers.  Yet there are clouds on the aggregators's horizon.

  • Brand strength depends on continued costs to  stand-out amongst internet search.
  • Regulatory changes can add costs and diminish opportunities
  • Dependence on customer data which requires compliance, GDPR, and adds to cost and risk
  • Disruption from new competitors
  • Changes in buying patterns e.g. insurance bundled with microservices

Amazon is in the news as a threat to both aggregators and insurers if it were to combine its customer data expertise and technology to become the pre-eminent aggregator.

Insurers- What strategy to follow?

  1. Stay independent of aggregators?
  2. Co-operate with aggregators?
  3. Acquire aggregators?

"Aggregators will continue to grow across Europe and are likely to capture an even bigger share of the online insurance market as customers become increasingly comfortable buying financial products online. Insurers should monitor this growth closely and examine their options for engaging with aggregators to determine how to maximize their opportunities during the next phase of this sales channel evolution".

McKinsey December 2018 

Whatever you do beware of relying on intermediaries between you and customers or you risk the danger of becoming commodity suppliers.