Net Metrics: Consumer Usage of On-Line Aggregators, Brokers and Other Intermediaries in UK Insurance

Table of Contents

0.0 EXECUTIVE SUMMARY

• Banks and building societies offering current accounts generate the highest volumes of web traffic
• Social networking and video sharing provider sites are very widely used by younger consumers
• Utilisation of the Internet as a distribution interface is surging for certain classes of insurance
• … although is retreating for others as consumers increasingly learn how best to use the medium
• Longevity of Internet usage is an important factor driving likelihood to purchase on-line insurance
• Consumers are focusing on a more limited number of sites to research and purchase insurance
• … and feel more likely to use that of their main bank or building society than any other option
• Most consumers understand the difference between on-line aggregators and on-line brokers
• Usage of on-line aggregators and brokers of insurance drops off slightly in the over 65 age group
• Users of on-line aggregators and brokers are motivated primarily by finding the best price
• Only a minority of consumers state that they are loyal to their main on-line aggregator or broker
• Over 10% of consumers making use of on-line aggregators and brokers question their accuracy
• … although they appear to be satisfied with most aspects of the service that they receive
• Confused.com has overtaken the AA and the RAC in terms of its rating for consumer awareness
• … with other on-line aggregators generally outperforming on-line brokers for this measure
• Only a minority of aggregators and brokers are definitely trusted by more than 10% of consumers
• moneysupermarket.com achieves comparatively high ratings in terms of actual usage to purchase
• On-line aggregation and broking of insurance has not yet been subject to significant consolidation

1.0 INTRODUCTION

• Research rationale
• The updated Net Metrics research incorporates a variety of new analyses of consumer behaviour
• Research sample
• Web-based aggregators and brokers of banking products
• On-line aggregators and brokers of insurance can use a variety of operating models
• … although some of the most successful protagonists possess differentiated approaches
• … and provision of white-labelled searching facilities between competitors is also commonplace
• Who owns whom in on-line aggregation and broking of insurance?
• Finaccord
• Other UK consumer research publications
• UK affinity and partnership marketing publications
• IPT / Tpoll

2.0 MARKET ANALYSIS

• Introduction
• Consumer propensity to visit different types of web site
• Frequency of visits is a key metric in the emerging environment for on-line financial services
• … with banking institutions offering current accounts being well-positioned in this respect
• … and both social networking providers and video sharing providers also scoring highly
• Insurance companies and some traditional affinity partners generate relatively little web traffic
• Over 80% of individuals aged between 16 and 24 visit the sites of social networking providers
• The gap in usage by age group for the web sites of video sharing providers is slightly less acute
• Consumer propensity to purchase via the Internet
• Consumers are most likely to have made on-line acquisitions of books or music
• … with well over a half of respondents having bought insurance via the Internet at least once
• On-line sales of computers and associated peripherals appear to be subject to a decline
• … although use of the Internet as a dist. interface is increasing for most forms of insurance
• Propensity to research and purchase insurance products over the Internet
• Nearly two thirds of those who use the Internet to research insurance also purchase on-line
• There is a clear link between longevity of Internet use and propensity to buy insurance on-line
• Number of quotes solicited prior to purchasing on-line insurance
• Consumers are using a more limited number of web sites to research and purchase insurance
• Likelihood to research or purchase insurance by type of web site
• Consumer propensity to research or purchase insurance varies greatly by type of web site
• Banking entities offering current accounts should make the most of high volumes of web traffic
• Awareness and influence of the on-line insurance aggregation concept
• Most consumers are aware of the difference between on-line aggregation and on-line broking
• … although a surprisingly high proportion assert that they are not influenced by this awareness
• Consumer usage of aggregators or brokers of insurance
• Between 25 and 64, usage of on-line aggregators and brokers of insurance is fairly constant
• Characteristics of effective insurance aggregator and broker web sites
• Over 75% of respondents consider eight characteristics to be either very or quite important
• Personalisation and the availability of exclusive products are the least valued characteristics
• Insurance aggregator or broker web sites used most frequently
• Two competitors are subject to the most frequent usage by almost a half of respondents
• Loyalty towards insurance aggregators and brokers used most frequently
• … although the research is indicative of low rates of loyalty towards even the leading players
• A key challenge for aggregators and brokers will be to maximise the loyalty of their customers
• Accuracy of insurance aggregators and brokers used most frequently
• Over one in ten consumers have concerns over the accuracy of product information provided
• … although the experience does not differ greatly among the leading aggregators and brokers
• Satisfaction with insurance aggregators used most frequently
• On-line aggregation of insurance is set to be reviewed by the Financial Services Authority
• Finaccord' s research facilitates the measurement of consumer satisfaction levels
• … and indicates that the majority are satisfied by the service offered by insurance aggregators

3.0 COMPETITOR ANALYSIS

• Introduction
• Consumer awareness of aggregation and broking web sites
• Confused.com surges past the AA in terms of its recognition rating among consumers
• … and moneysupermarket.com and comparethemarket.com have both improved their rating
• …. but well over half of the web brands covered are not recognised by over 75% of respondents
• Consumer trust of aggregation and broking web sites
• Several web brands have achieved a significant rise in their trust rating during the last year
• … although the majority lack the financial resources to genuinely win the trust of consumers
• Consumer usage to purchase of aggregation and broking web sites
• In terms of utilisation to buy insurance, moneysupermarket.com is performing efficiently
• … with both gocompare.com and Tesco Compare also having made significant progress
• Over 20 players register at least a reasonable degree of awareness and trust among consumers
• BUDGET, Insureandgo and moneysupermarket.com perform well in terms of actual utilisation
• The AA' s rating for trust is bolstered by the fact that breakdown recovery is its core business
• Four on-line competitors are likely to be growing at rates well in excess of their rivals
• While Confused.com is strengthening its leadership position in the on-line aggregation market
• … it does not appear that the sector has been subject to much consolidation during the last year

4.0 AGGREGATOR AND BROKER PROFILES

• Introduction
• 4.1 AA
• 4.2 AdviceOnline
• 4.3 A-Plan
• 4.4 Auto Direct
• 4.5 AWD Moneyextra
• 4.6 BeatThatQuote.com
• 4.7 BUDGET
• 4.8 Bullhorn.co.uk
• 4.9 buy.co.uk
• 4.10 comparemoreatDixons.co.uk
• 4.11 comparethemarket.com
• 4.12 ConfidentCover.com
• 4.13 Confused.com
• 4.14 CoverSave
• 4.15 Diamond
• 4.16 Direct Choice
• 4.17 Easy Quote
• 4.18 EasyCover
• 4.19 elephant.co.uk
• 4.20 Endsleigh
• 4.21 Express Insurance
• 4.22 FinanceDaily.co.uk
• 4.23 Find.co.uk
• 4.24 First Insurance
• 4.25 Fool.co.uk
• 4.26 Girl Motor
• 4.27 gocompare.com
• 4.28 Goodinvestor.com
• 4.29 Hastings Direct
• 4.30 insurances.co.uk
• 4.31 insurancewide.com
• 4.32 insure
• 4.33 Insureandgo
• 4.34 Interactive Investor
• 4.35 Its4me
• 4.36 Know Your Money
• 4.37 Ladybird Insurance
• 4.38 masterquote
• 4.39 MoneyExpert
• 4.40 Moneyfacts
• 4.41 MoneyMonkey.co.uk
• 4.42 Moneynet
• 4.43 Moneyquest
• 4.44 MoneySavingExpert
• 4.45 moneysupermarket
• 4.46 Moneyway
• 4.47 Moneywise
• 4.48 Motor Direct
• 4.49 NationalPrice.com
• 4.50 Only Insurance
• 4.51 Peoples Choice
• 4.52 PriceRunner
• 4.53 Q4 Insure
• 4.54 Quoteline Direct
• 4.55 Quotezone
• 4.56 RAC
• 4.57 Reduce My Quote
• 4.58 Screentrade
• 4.59 simplyswitch
• 4.60 Swinton
• 4.61 Tesco Compare
• 4.62 The Insurance Centre
• 4.63 The Thrifty Scot
• 4.64 theidol.com
• 4.65 thisismoney.co.uk
• 4.66 Unravelit
• 4.67 uSwitch.com
• 4.68 webmoney
• 4.69 yesinsurance.co.uk
• 4.70 Your Money

GRAPHICS / TABLES

• Sample breakdown by age group, household income band and geographical location - entire survey
• Sample breakdown by longevity of Internet usage - entire survey
• Aggregators and brokers of banking products covered for the first time in the 2008 research
• Who owns whom in web-based aggregation and broking of banking products in the UK?
• Who owns whom in web-based aggregation and broking of banking products in the UK? (continued)
• Consumer propensity to visit different types of web site, 2008
• Consumer propensity to visit different types of web site, 2008 (data)
• Consumer propensity to visit the web sites of social networking providers, 2008: detailed segmentation (data)
• Consumer propensity to visit the web sites of video sharing providers, 2008: detailed segmentation (data)
• Consumer propensity to purchase assorted goods and services via the Internet, 2008
• Comparison of consumer propensity to purchase assorted goods and services via the Internet, 2006-8 (data)
• % of custs. acquiring different ins. prods. through the Internet - 2007, 2005 and all previous years comp. (data)
• Consumer propensity to research and take out insurance products over the Internet, 2008
• Consumer propensity to research and take out ins. products over the Internet, 2008: detailed segment. (data)
• Number of quotes solicited by consumers prior to taking out ins. products over the Internet, 2006-8 compared
• Number of quotes solicited by cons. prior to taking out ins. products over the Internet, 2006-8 compared (data)
• Consumer likelihood to research or take out insurance products from different types of web site, 2008
• Consumer likelihood to research or take out insurance products from different types of web site, 2008 (data)
• Comparison of consumer propensity to visit and cons. likelihood to search for or take out ins. products, 2008
• Awareness of the difference between on-line insurance aggs. and on-line brokers of insurance, 2008
• Consumer usage of web sites of aggregators or brokers of insurance, 2008 (data)
• Importance of agg. and broker web site characteristics in persuading custs. to take out insurance, 2008
• Imp. of agg. and broker web site characteristics in persuading custs. to take out insurance, 2008 (data)
• Insurance agg. or broker web sites used most frequently by cons. to research or take out ins. products, 2008
• Degree of loyalty engendered by banking aggregators and brokers used most frequently, 2008
• Degree of loyalty engendered by banking aggregators and brokers used most frequently, 2008 (data)
• Perceived accuracy of insurance aggregators and brokers used most frequently, 2008
• Perceived accuracy of insurance aggregators and brokers used most frequently, 2008 (data)
• Cons. satisfaction with agg. web site used most freq. when searching for and / or taking out insurance, 2008
• Cons. satisfaction with agg. used most freq. when searching for and / or taking out insurance, 2008 (data)
• Ranking of web sites of aggregators and brokers of insurance by overall consumer awareness, 2008
• Ranking of web sites of aggregators and brokers of insurance by overall consumer awareness, 2008 (cont.)
• Ranking of web sites of aggregators and brokers of insurance by consumer trust, 2008
• Ranking of web sites of aggregators and brokers of insurance by consumer trust, 2008 (continued)
• Ranking of web sites of aggregators and brokers of insurance by consumer usage to purchase, 2008
• Ranking of web sites of aggregators and brokers of insurance by consumer usage to purchase, 2008 (cont.)