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Agenda

Agenda. What is an aggregator? The Aggregator Market Some Facts and Figures Customer Reaction Market Reaction The Future. What is an Aggregator?. A quasi insurance broker with good technology and marketing skills

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Agenda

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  1. Agenda • What is an aggregator? • The Aggregator Market • Some Facts and Figures • Customer Reaction • Market Reaction • The Future

  2. What is an Aggregator? • A quasi insurance broker with good technology and marketing skills • An insurance organisation which lies between the customer and insurance companies/brands • A service that gathers information provided by different sources and, matching it to the requirements of the user, organises it under a common search interface. • Originated in the personal finance and utilities sectors

  3. Entrants to the Market First Central gocompare moneysupermarket confused tescocompare 1999 2000 2001 2002 2003 2004 2005 2006 2007 Compare the market insurancewide SimplySwitch Confidentcover uSwitch Onlyinsurance

  4. Main Players in Personal Lines Insurance • 5 dominant players potentially controlling ca. 90% of the market • Confused • MoneySupermarket • Go Compare • TescoCompare • Compare the Market

  5. Leading Aggregators

  6. How Does an Aggregator Work? • Has no regulatory status • Provides no advice or recommendations • Simply link customers to good insurance deals • Paid per sale • Serious Marketeer/brand creators • Strong profit margin

  7. Customer View • In 2007 67% of insurance buyers used price comparison sites (responsesource) • 80% of customers who used price comparison sites would again (insurance times) • Number one determining factor is price • Confused – 65% of customers buy on price, 35% consider other variables • Commoditisation – Brand and added value features have decreasing impact on customer inclination to buy • Aggregators hold 4% market share on motor and 1% on home insurance

  8. Aggregator Usage Figure 3: Consumers using an Aggregator between August and October ’07 (Responsesource)

  9. Insurance Website Visits Figure 2: Top 15 websites in the Insurance online industry for month of Jan, 08 (Hitwise, 01.2008)

  10. Potential Challenges • 94% of customers believe that policies listed on price comparison sites are not fully explained and 84% labelled them confusing (insurance times) • Only 12% of the customers received the same premium from the direct insurer as quoted on the comparison site (Defaqto) • FSA to examine the rules governing websites that compare insurance products • Recent VAT ruling could tilt the playing field

  11. Insurance Market Reaction • Not an obvious threat to the status quo • Most major brands participate attracted by volume • Jury still out on quality and stickiness of business • RBS Insurance Group have avoided and is openly attacking • Some impact on market’s ability to increase rates • Have contributed to increased competition and marketing spend in UK Personal Lines

  12. The Future • Aggregators are expected to show huge growth • They will represent an increased part of the market - around 10% market share by 2010 Figure 4: Illustrative distribution mix, UK personal lines (KPMG LLP [UK]

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