Piling in to sell it cheap

The only mystery about aggregator insurance websites is not that they have taken off, but why it took so long for it to happen in a commercial world of rapidly-changing technology.

However, they are not the originators of the idea – brokers have been aggregators for years, working with insurer panels to provide value for money cover backed up by personal service.

By contrast, internet aggregators are faceless machines with no heart, no soul and no personality.

Buying and selling via the internet means that choosing insurance from the comfort of the home was always likely to be successful.

The clue to all this is marketing. If you can throw big budgets at TV, radio and press advertising, then brand names will stand out. In this respect, Direct Line, Zurich, NFU Mutual, Churchill and Norwich Union are instantly recognisable.

Now Dixons, the high street retailer, is set to become the first commercial insurance aggregator. Tesco and Saga are also said to be ready to sign up to motor aggregation.

According to Richard Mason, a director of moneysupermarket.com, it’s all about maximising choice coupled with the lowest prices.

I am not so sure – it is certainly a handy (and lazy) way to go about buying insurance – careless even. The Tesco ‘pile it high and sell it cheap’ principle does not necessarily apply to insurance as it does to baked beans.

“It is noticeable that Direct Line and Norwich Union – arguably the two best motor insurance brands in the business – do not use aggregator sites. Why should they, their brands are household names?

Price is crucial, but the consumer today is more sophisticated than that. Would you buy a holiday on the Costa Fish and Chips without knowing whether the room had hot and cold running water and a bed?

Motorists, like holidaymakers, are more discerning than they are often given credit for by some marketing gurus.

And not all that many motorists get excited about a cheaper quote. According to Sainsbury’s Bank, one motorist in four has been with the same insurer for four years or more, and 12% say they don’t think they can get a better quote.

Note the wording: not ‘were unable to find’ a better quote, but ‘did not think’ they could get a better one. In other words, they did not look any further than their current insurer.

It is noticeable that Direct Line and Norwich Union – arguably the two best motor insurance brands in the business – do not use aggregator sites. Why should they, their brands are household names.

Once again, the market is being saturated with another means of buying insurance, confusing the consumer even more.

Little wonder that Sainsbury’s Bank found that thousands of those buying motor insurance were stressed out as a result.

For quality service and stress-free professional advice, the best aggregator remains the broker.