Aggregators cause Aggravation
Does This Herald The End of an Era?
Together with all of us who cringe at those really annoying comparison adverts on radio and TV, people who spend much time browsing the internet would have noticed the ads from insurance aggregators on most of the popular websites, but what are these aggregators – what do they do and should people really take notice of them?
Hailed by many as the Holy Grail when it first came into being, the insurance aggregator is now fast losing favour. One of the insurance industry's market leaders has now declared they will decline to accept any new business for private cars, vans or household risks which comes from or originates in any way from aggregator and internet quotation comparison sites. As from 1 August 2010, this organisation is having no truck with insurance aggregators – word on the street is that many other companies will follow suit.
To be fair, who actually knows what an aggregator is? (it somehow conjures up a picture of a cross alligator!) To explain, take, for example, car insurance: simplistically, this is usually sold in one of three ways:
The broker/financial advisor: This is the traditional method whereby the broker approaches insurers and presents to his client a range of options, offering professional advice on the merits of each and making an informed recommendation to the client. The broker gets paid a commission from the insurance company selected.
Direct Insurance: The client approaches the insurance company directly, via telephone or on-line and by-passes the broker. Whilst this may save a small amount of money, you are not guaranteed the best of advice or personal service as the Direct Insurers can only offer their own policies.
Insurance Aggregator: This is a website portal or search utility to enable a client to gain several quotes via an electronic e-quote form. The insurance aggregator offers 'virtual brokers' opportunities to offer their cheapest insurance policies, based on a pre-determined list of specified needs as disclosed by potential clients, but without the need to provide a member of staff offer help or advice. The insurance aggregator provides the potential client with comparative insurance quotes and the opportunity to select a specific quote, arrange and pay for it on-line.
So, what's in it for the aggregator? The insurance aggregator develops the "quotation portal/search utility", markets this medium and agrees with the participating advertisers to be paid a referral fee for policy contacts concluded – based on the client information provided.
This has been the source of misery for many, many people who have found themselves uninsured because they failed to declare vital information – sometimes because the insurance aggregator failed to ask relevant questions in the first place!
Insurance aggregators have not only disturbed the market in a very negative manner, they have resulted in many people facing horrendous problems as a result of finding themselves either incorrectly or insufficiently insured - or not insured at all.
It is said that things go full circle. People buy from people, so it is worth while finding a professional insurance broker who will take the time to listen and advise on an individual basis. Life doesn't run to a series of tick boxes and in truth, not many people will mourn the passing of the insurance aggregators – except those who make large sums of money from them. The old adage that "if it is too good to be true it probably is" could have been written for the aggregators, so don't feel too bad about their probable demise, after all, you certainly won't miss their advertisements!