GoCo shaking up price comparison as auto-switching customers boom

GoCo’s auto-switching business is exceeding all expectations as it continues to pile on customers in an innovation which is shaking up the price comparison landscape.

There were 300,000 auto-switching customers in 2019, growing 71% in the final six months of the year.

The figures are 37% ahead of the GoCo management expectations.

GoCo operates two brands, Look After My Bills and weflip, switching customers automatically on things like electricity to better priced providers. A refinancing last year was completed to help investment in its disruptive tech.

GoCo chief executive Matthew Crummack said the type of customer joining up was typically on a standard variable tariff with a big six energy firm.

He said GoCo had a enjoyed a lot of success on social media rather than some of the more standard online and media channels.

“We go into social media and find them in different places. We find that to be a more effective way of acquiring customers,” he said.

Asked if the technical barriers were too great for auto-switching to be used in general insurance, Crummack said: “It is not about technical barriers, but whether the demands and needs of the customers are met within the regulation.

“It is a little more complex than energy because it is financial services. There are areas of general insurance that are underpenetrated when we come to auto-switching.”

Revenue was broadly flat at £152.4m and operating profit was lower £20.3m (2018: £37.5m).

Crummack said lower profit was due investment in the innovations, protecting their margins and the rewards business, although still profitable, had a challenging year.

GoCo expects the investment in auto-switching to be earnings accretive in 2022. 

The core Gocompare business finished the final quarter strongly, growing 4%, aided by the £250 excess proposition, Crummack said.