Magazine publisher has increasingly focused on ecommerce to drive revenue

"GoCompare lists prices for services such as car and home insurance, mortgages and other financial products. In a trial partnership with an unnamed rival price comparison service, Future had already allowed readers to compare prices of products such as laptops and washing machines. 

It now hopes to do the same for broadband and insurance and plans to use GoCompare’s expertise in financial services to create new content, such as a newsletter offering the “best money tips of the month”. GoCo Group, the parent company of GoCompare, has recommended that shareholders approve the deal at a vote in January. Its shares were up 10 per cent on the news. They were valued at 136p under the terms of the deal, a premium of about 23.6 per cent based on their Tuesday closing price."

Patricia Nilsson FT 25th Nov 2020

The FCA's intention to stop price optimisation by insurers i.e. offering new customers a lower price than existing customers means aggregators will have to do more than ensure buyers home in on lowest prices when renewing insurance policies. Whilst price optimisation has been criticized it has addressed a problem for insurers, particularly smaller insurers.

The acquisition costs of going direct, rather than via comparison websites, is around eight times the typical £50 charged by aggregators. That is a considerable cost.

To continue to use comparison websites insurers will have to compete on product innovation and cost optimisation in order that they can offer competitive pricing to both loyal and new customers.

The Future/GoCompare venture might well be the opening shots of 'aggregator wars'  in marketing products to customers. It should be the catalyst for insurers to think more of how they win new customers rather than rely on price.

Multi-product, multi-brand based upon intelligent marketing for upsell and cross-sell is an obvious step. For that to be successful insurers will have to execute the data mastery of the digital giants who are the masters of leveraging customer data to sell and deliver ever more products and services.

The disappearance of price optimisation may also be the catalyst for insurers to increase the proportion of insurance marketed and sold directly. Customers who can manage all their policies for multiple lines in an easy to use portal that reminds and offers them customised products to fit their lifestyles and budgets at the right time could be a game changer.

Better still if an insurer can let them manage policies from other companies in the same portal. To get that working effectively data mastery will be vital- joining , normalising and categorising disparate data sources/formats from the M&A activity of the past decades with alk, those data silos and technology stacks.

Can be daunting and also an opportunity for insuretechs like HUGHUB that utilise APIs and data hubs to wrap around all those technology stacks and legacy systems that bedevil insurers. 

Worth a look if you are truly intent on digital transformation.

Whether direct or in combination with comparison websites insurers have the opportunity to reduce churn rates and focus on lifetime revenues rather than short-term gain.