The latest partnership between Comparethemarket.com and insurtech Getsafe could create a shift in the UK’s personal insurance market. Insurtechs have developed tailored policies for individuals using customers’ own data to personalise features. These include usage-base-insurance or fitness trackers alongside protection policies. By partnering with an insurtech, Comparethemarket.com will expose a wider range of customers to personal insurance products that are not only more price competitive, but also tend to be more flexible, with customers having the option to cancel or pause their premium at any time, as well as being fully digital, says GlobalData, a leading data and analytics company. This means that insurers will need to differentiate their products beyond the price point to reach new customers.

Price comparison websites (PCW) are an important distribution channel for the UK personal insurance market. GlobalData’s 2020 UK Insurance Consumer Survey finds that 24.8% of customers purchased home contents insurance from a PCW. The survey also finds that 66.4% of consumers purchased contents insurance from a PCW because they had used the site before. While this highlights PCWs ability to attract returning customers and cross-selling opportunities, it also flags that PCWs are heavy reliant on customers that switch insurance providers year-on-year as their customer base and are not attracting enough new customers through their reward offerings.

Jazmin Chong, Insurance Analyst at GlobalData, comments: “Home and motor insurance customers are given more incentives to switch providers at renewal due to the insurance industries’ loyalty penalty – where insurers increase premiums to existing customers despite their risk not changing, while often offering better deals to prospective customers. However, the Financial Conduct Authority (FCA) is set to implement a new regulation by the end of 2021, which will decrease incentives for customers to switch, as insurers will no longer be able to charge more to existing customers than new ones. The change in regulation is expected to have the biggest implications for PCWs as there distribution is heavily reliant on consumers switching behaviours. GlobalData predicts that PCWs would have to innovate their business models, delivering benefits to consumers that go beyond price to attract customers.”

GlobalData’s report, ‘United Kingdom (UK) Insurance Aggregators 2021’, finds that the top three cheapest combined home and content insurance policies listed on Comparethemarket.com came from incumbent insurers, namely Privilege, Halifax, and Churchill. While home and contents coverage from these three leading providers showed a difference in price, the coverage level had very little distinguishing features. A lack in distinguishing features is a key element found in incumbent insurance offerings, which traditionally only compete on price.

Chong continues: “Comparethemarket.com’s partnership with Getsafe opens up the possibility for customers to have access to more customizable polices due to the personalization feature, which allows the policy to compete on price. For example, Getsafe customers can insure specific contents that are important to them, rather than having to pay a flat premium fee with a cover level that may not be applicable to their own needs. Additionally, Getsafe is a fully digital platform that also gives customers the flexibility to cancel their policy at any time.

“With the addition of Getsafe being listed on Comparethemarket.com, the site may look to partner with additional insurtechs. This, combined with the FCA’s regulation change and PCWs embracing insurtechs on their sites, will make it clear to insurers that they will need to differentiate their products beyond the price point to reach new customers.”