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Insurance aggregators
Category: Opinion 2 Feb 2015
Written by Atty. Dennis B. Funa
http://www.businessmirror.com.ph/insurance-aggregators/
BusinessMirror – Insurance aggregators
It guarantees that the quote it displays on the screen is the price that the client
will pay.
Initially, worldwide, only about 1 percent of motor insurance sales were
procured online. This subsequently increased to 10 percent. Today 40 percent
of motor insurance sales are placed online. It is projected that this will increase
to 75 percent in the coming years.
In a study made by PricewaterhouseCoopers on the German motor-insurance
market, it was found that in 2010, 600,000 contracts were concluded through
comparison web sites. This increased to 1.5 million contracts in 2013.
Aggregators have revolutionized the distribution of insurance worldwide. This
trend has followed the migration of commercial transactions to the Internet just
as Expedia and Priceline have transferred the bulk of airline-ticket sales from
travel agencies.
It has been observed that with the rise of the aggregators, price competition has
become stiffer, leading to decreased profitability. Thus, in the UK, the most
advanced aggregator market, it was observed that aggregators have caused
the motor-insurance market to become “commoditized.” It was stated that
“insurers are no longer competing on brand, marketing, service or other
intangibles to the same extent; rather, they are competing almost solely on price
and their position on the aggregators’ screens.” Indeed, Web aggregators are
seen as a tool to decrease distribution costs. With the aggregators, there is no
need for the traditional insurance agent. Price becomes the primordial criterion.
And the time spent by the consumer searching for the appropriate insurer is
reduced.
Already, aggregators are predicted to be supplanted by other technologies that
will make aggregators redundant. According to Allianz, “Google is effectively an
aggregator for most goods or services. If you type “car insurance” into Google,
the brands for 13 car-insurance underwriters or distributors will appear on the
first page. Many of these insurers provide and/or advertise the ability to get a
“quote in just two minutes” or something similar and/or discounts for purchasing
online of up to 20 percent. Thus, in around 10 minutes, a consumer could obtain
quotes from up to five motor insurers.”
In Asia online aggregators have established their presence in Hong Kong,
Singapore and India. Nowcompare.com was launched in Hong Kong in 2011. It
is the world’s first international health-insurance aggregator web site.
MyMoney.com.hk was launched in Hong Kong also in 2011 to market life
insurance. Embracing the concept, it was announced that the Monetary
Authority of Singapore and Banka Negara Malaysia will launch a Web
aggregator for life products.
http://www.businessmirror.com.ph/insurance-aggregators/
BusinessMirror – Insurance aggregators
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Dennis B. Funa is currently the deputy insurance commissioner for Legal
Services of the Insurance Commission. E-mail: dennisfuna@yahoo.com.
http://www.businessmirror.com.ph/insurance-aggregators/