Google’s BeatThatQuote.com, MoneySuperMarket.com, CompareTheMarket.com, and Confused.com are all helping consumers win on price in the UK. Usage based insurance is now deeply entrenched and accepted. In the UK, all insurers and most agents are on comparison sites. Retention has become a huge issue.
Comparison sites are small, but on the move, in the US auto insurance market where the travel sites have laid the tracks with consumers. Comparenow plans to double its ad spending in 2015. CoverHound is growing. Both have relationships with Google at some level and many speculate Google will make a move into the US insurance market in 2015.
Andrew Rose, CEO of Compare.com, provided public advice to agents and brokers in a recent interview with Insurance Business America which can be summarized as: 1) make sure you are part of the consideration set; and 2) add value beyond the transaction. This seems like sound advice for carriers as well.
Several comparison sites are agencies and have natural retention incentives, for example, Answer Financial, the largest of the US comparison sites, and Obrella. The consumer has choice but there isn’t motivation to encourage churn.
So what does this mean for US insurers?
To respond to the rise of aggregators and other disrupters, insurers must deepen relationships with their existing customers and move closer to their key customers in ways that add value and can’t be easily disrupted by pricing.
One pathway is making more aggressive moves with telematics and UBI to acquire, reward and retain high value customers. The value of telematics for retention is largely untapped.
And there is a window of opportunity while the channel is still small to develop new strengths, new retention models, and carve out profitable niches that are defended on value beyond price.
Connect with us if you want to talk more about UBI driven retention strategies that leverage telematics-driven rewards, gamification, and feedback.