INSURERS : What strategy to adopt with aggregators?

The constant rise of online aggregators is likely to be one of the main challenging forces in insurance distribution.

Online insurance aggregators have changed the landscape of the insurance industry, providing customers increased choice and ease in product selection. They allow consumers to conveniently compare insurance quotes and coverage from a multitude of companies from one website.
After years of strong media investments they become vital audience hubs.

This evolution is the result of

  • A permanent search for transparency from customers
  • The simplification of insurance products that reduces the need for advice
  • The transformation of aggregators : they are now more than just simple price comparison engines but integral platform where users can get solution recommendations, compare coverage and prices and directly subscribe

In this article, Axys Asia takes a look at how insurers can assess aggregators as part of their distribution strategy to better embrace the rise of digitally originated business.

How aggregators could support your objectives?

Business growth acceleration
Help you to accelerate market share growth and increase your distribution capabilities.

Customer acquisition
Aggregators allows you to address specific target audience, set up cross-sell acquisition strategies and this is an opportunity to leverage their online visibility.

Cost Efficiency
This is a way to reduce your acquisition cost and acquire profitable targets leveraging filter capabilities offered by aggregators.

That being said, it is also important to evaluate the risks before taking the plunge.

Threat on inforce customers
Aggregators strongly increase the customer negotiation capability due to his ability to compare products.

Level of dependencies
Online brokers become the customer’s partner so there is a strong dependency in term of customer relationship management and renewal process. This is also a loss of market behaviour knowledge and direct-contact with prospects.

Price war
Price is one of the most important comparison criteria among products. This dumping effect could have a negative impact on profit margin.

In order to better design the strategy to adopt you need to know the options offered by the aggregators.

This is important to understand that aggregators have different possible approaches. You will find below the landscape of the different models you can find on the market:

 

1. Operating models

1. Rating & Reviews
Visitors can see ratings and reviews from verified customers, for each product available onsite.
Offers onsite are product-oriented.
2. Special Offers
Visitors can look for and enjoy special offers in the form of discounted prices, extra benefits or free gifts subscribing on this site
3. Quote requests
Visitors can view and compare the offers and/or the providers.
Visitors will leave their contact information to get a quote.
4. Onsite quotes
Visitors can generate personalized quotes & immediately see the results onsite.
Some aggregators redirect users to purchase the policy outside of their site (provider’s funnel).
5. Online broker
Visitors can go through the complete transaction process from comparing offers, requiring personalized quotes and viewing immediately till online payment on the same site.
.

2. Business model options

1. Insertion fee or pay per click
Model
Insurance providers pay a fixed monthly or yearly subscription fee to appear on the platform and receive leads.

Monetization
Model #1 : Cost per click (CPC)
Model #2 : Subscription fees esp. for content (can be combined with other models)

Stakes
– Ensure visibility and Brand promotion on a captive audience
– Traffic generation towards Brand owned website (product presentation, quote funnel etc.).

2. Pay per lead
Model
Insurance providers pay for each lead they acquire. They receive leads either by automatic distribution or by active choice.

Monetization
Model #1 : Cost per lead (CPL)

Stakes
– Ensure visibility and Brand promotion on a captive audience
– Transfer a volume of qualified leads
.
.

3. Pay per acquisition
Model
Insurance providers pay for each lead they acquire. They receive leads either by automatic distribution or by active choice.

Monetization
Model #1 : Cost per acquisition (CPA) : new customers and renewals

Stakes
– Ensure visibility and Brand promotion on a captive audience
– Transfer a volume of new contracts

4. Commission on deals ⭐
Model
Insurance providers pay a percentage of closed deals

Monetization
Model #1 : Direct revenue source

Stakes
– Ensure visibility and Brand promotion on a captive audience
– Transfer a number of contracts and revenue
.
.

3. Value proposition approaches

1. Service-oriented

A customer-need approach, providing comprehensive financial advisory (Tools & calculators, financial guides, investments etc.), from which users discover the need of investing into insurance products.

2. Price-oriented

A product centric approach, providing dedicated information of insurance products for users to compare and find the best solution.

3. Aggregators in Asia

In response to a growing online market and the need to provide greater choice, the last decade has seen an increasing number of aggregator platforms launching in the Asia market, particularly in the personal lines space.

As one of the fastest growing fintech startups in Asia, GoBear is leading the way in simplifying the financial product user experience.

Since its launch in 2015 in a single country, GoBear has grown to 7 countries, 15 million users, four million monthly visits, and more than 1,200 products (credit cards, insurances, loans) in Asia.

 

Go further with Axys Asia. We help you to identify opportunities and run the best strategy to take advantage of online aggregators

  • Identify directions and opportunities
  • Define, implement and pilot your E-commerce strategy
  • Identify and engage the relevant partners
  • Negotiate, finalise and sign the contract
  • Deploy the solution
  • Track and optimise the performance
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