Biba is investing price comparison clauses that limit brokers' cross-selling opportunities
Since the explosion of aggregators within the insurance market, attempts have been made to quell brokers’ fears with assurances of the cross-selling opportunities they will enjoy by hopping on board.
Brokers have feared that aggregators, not equipped to provide advice or explain the intricacies of a policy, may become the vehicle of choice by consumers wanting insurance cheap and easy.
Some have become resigned to the fact that aggregators are here to stay, with about 60 joining price comparison panels in the UK.
To compete effectively on aggregator sites, brokers often sacrifice their own fees and commission to tempt customers with lower prices.
They do this with the understanding that they will have opportunity to make that up through cross-selling other products, separate from that particular transaction.
Cathie Bruce, distribution and customer service director at Groupama, said: “The ownership of the consumer is with the aggregator until they take out a policy after that point the ownership remains with the insurer they bought from.”
However, reports that Biba has been investigating complaints that some aggregators are putting clauses in their policies with brokers to stop them cross-selling policies, has become a source of frustration for an industry that feels its margins are already being squeezed.
Although not widespread and so far seemingly limited to certain products listed on the sites, Biba is looking to curb the clauses before they become a more popular trend.
Some fellow aggregators have called the clauses deplorable. Confused.com’s managing director Debra Williams said it’s those actions that fuel suspicion towards aggregators.
Williams said they in no way restrict cross-selling.
uSwitch said it has no cross-selling clauses in place but only until a policy has been sold. After that, a broker is free to try and sell that particular client another product. uSwitch said the clause was necessary to protect browsers on the sites, looking for quotes, from being hounded into purchasing policies.
Insurancewide allows for cross-selling but has forged a deal with brokers on its panel that they pay the site a cut of what they cross-sell to the consumer.
To limit a broker’s ability to work with aggregators and compete on a level playing field will only serve to heighten the controversy and suspicion surrounding aggregator sites.
It’s true that brokers may need to become more resourceful in the products they list on the sites in order to set themselves apart from the competition but they should be given a fair shot.
There is likely to be more opportunities in the future for brokers and aggregators to work more closely together, particularly as the more complicated SME policies move online.
