What does the future hold for insurance aggregators? Based on global trends, Erik Sandquist shares three trends that may characterize aggregators’ future.

Insurance aggregators have come to dominate parts of the UK market. While US penetration has been slower, the Accenture Distribution and Agency Management Survey found that 60 percent of US insurers are weighing the merits of launching their own comparison site—more than in Europe (45 percent) and Asia Pacific (57 percent) but not as many as in the United Kingdom (83 percent).

But what does the future hold for insurance aggregators? Given research into global trends, Accenture anticipates three major trends will characterize aggregators’ future.

  1. Continued growth. We believe that aggregators will continue to grow at a rapid paced, with two main business models: expanding into new markets, and offering new products in existing markets. Bolstering this growth is increased consumer trust in online advice, as well as greater comfort in making increasingly complex purchases online. And of course, aggregators themselves are driving this growth, with their ability to focus on extracting more value from the customer relationship, obtaining better terms from carriers, and leveraging new platforms to find and attract customers.
  2. Disruption of insurance industry economics. As discussed earlier in this series, many carriers are choosing to work with aggregators—but those that do so must be careful not to cannibalize their higher-profit lines, or dilute hard-won brand value. In addition, agents may find themselves with smaller commissions due to aggregator fees, which puts the pressure on agencies to improve profitability and adapt operating models. Finally, aggregators make it easy for customers to choose a policy based on price. Over time, this can erode customer loyalty and leave customers at risk of being underinsured.
  3. Evolution of the business model. As aggregators mature, we expect to see shifts in how they conduct business, from expanding into new geographies or lines of business, as well as expanding beyond price comparisons to capture a larger share of the value chain. Aggregators may also become more involved in offering expanded services, such as white-label products or reselling the vast amounts of data and analytics that they collect.

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