Insurance aggregators could soon be 'redundant'

Insurance aggregators could soon be 'redundant' | Insurance Business

Insurance aggregators could soon be
An insurer has predicted that insurance aggregators themselves could soon be disrupted and supplanted by other technology that would render their business models redundant.

In its submission to the Financial System Inquiry last week, insurer Allianz claims that reducing consumer search time is often identified as one of the main advantages of aggregators.

However, the insurer argues that technological and other developments are increasingly achieving this objective through alternative means and supplanting the role of aggregators.

"Somewhat ironically, aggregators are being made increasingly redundant as a result of further technological advancements," Allianz states.

"For example, Google is effectively an aggregator for most goods or services. If you type 'car insurance' into Google, between paid and organis search responses, the brands for thirteen car insurance underwriters or distributors (as well as a few aggregators) will appear on the first page.

"Many of these insurers provide and/or advertise the ability to get a 'quote in just 2 minutes' or something similar and/or discounts for purchasing online of up to 20%. Thus, in around 10 minutes, a consumer could obtain quotes from up to five motor insurers," Allianz states.

Allianz goes on to explain that insurers themselves are moving rapidly to take advantage of consumers’ growing preference to purchase products - including insurance - on smartphones.

"For example, cognisant that consumers do not wish to answer long question sets on their phone, insurers are reducing the number of questions required to price a risk.

"As a result, quote times are being further reduced by pre-populating answers using information from third-party databases and other information sources, and the use of more sophisticated risk estimation techniques."

Allianz's submission - as reported last week - raises a number of problems the insurer sees with any government move to enforce insurer participation on insurance aggregation sites, which it sees as competitors in the marketplace.