Europe has always been a hotbed for price comparison websites as insurers, particularly Tier two and three insurers, found the acquisition costs of circa £50 per new customer so much more beguiling than the £400 or so cost of winning them direct.
The acquisition of 'GoCompare' late last year' , sale by Admiral of 'Confused.com' and $150m series D funding of Zebra in the US show how much investors value price comparison services.
Future, Britain’s biggest magazines publisher, swooped on price comparison site GoCompare late November, in a £594m takeover deal.
The board of GoCo Group unanimously recommended that shareholders vote in favour of the deal. Future had already received undertakings representing 33.5% of shareholders, including from Wood, committing to the deal.
“In just four years since its demerger from Esure Group, GoCo Group has created significant shareholder value,” Wood said. “I believe the offer, comprised of a significant equity component, provides a compelling opportunity for shareholders to benefit in substantial future value creation.”
Admiral consolidated its comparison businesses into a separate division, Penguin Portals, in 2019. The gross value of the unit’s assets at the end of June was £78.1m, with the division contributing £13.6m of profits to the wider group in the first six months of the year. “Penguin Portals offers an exciting opportunity for us to expand our consumer brand portfolio and geographic reach,” said Tariq Syed, chief executive of RVU. “With its focus on insurance, Confused.com perfectly complements Uswitch’s existing expertise in the home services category, and with equally established offerings in other countries we have an opportunity to help even more consumers find the right deals for their needs.”
Insurers facing the new challenge in 2021 of acquiring new customers through better products and service rather than price optimisation i.e. charging new customers lower premiums than existing ones on price comparison websites. Price optimisation must be replaced by cost optimisation to fund the higher costs of customer acquisition.
ZEBBRA believes the US is ripe for adoption and growth of price comparison in the US.
The Austin-based company, which operates an insurance comparison site, raised $150 million in Series D funding, led by an unnamed investor.
Joining the round were a group of investors, including Weatherford Capital, as well as Accel, which led the company’s $38.5 million Series C last year. The investment brings The Zebra’s total raised to $251.5 million since its 2012 inception, as well as values the company at more than $1 billion, CEO Keith Melnick told Crunchbase News.
"Next up, The Zebra intends to leverage more customer data to create personalized experiences and create more products. The company provides auto and home insurance now, but plans to add rental, life and pet insurance, as well as enabling better communication between agents and customers."
Chrstine Hall Crunchbase News April 12 2021.
Might be a call to action for insurers and brokers to make a better fist of winning and keeping new customers by creating personalised, relevant, compelling experiences and products for a post-pandemic age.
“We thought there should be comparison shopping in insurance, which exists in other countries — like Europe — but it took a while for it to take in the U.S.,” Locke said in an interview. “The big thing is The Zebra is at a point where everything is working. The product is great for consumers, and there are more carriers on it, both established companies and insurtech. More than anything, the company feels like it is really working well. The team is excellent, and they have an opportunity to be more aggressive to get their brand out there.”