Of course advisers and aggregators can coexist - and it will be better for everyone
Price aggregator sites have been cropping up in a huge variety of industries from electronics to travel. The trend can be tracked alongside the rapid increase in consumers’ desire for more information and immediate access to products.
The insurance industry has proven itself no exception, either to the change in consumer behavior or the entrance of price aggregators into the market. Dozens of insurance aggregator sites have staked their claim across the entire industry, from motor to life, consumers can compare, review and apply for quotes online.
A short time ago, customers were only able to view their insurance options online and then were referred to a real life human to complete a purchase, now however online purchasing is common. In the UK for example, 60 to 70 percent of auto insurance premiums are now completed online directly via aggregators.
And it’s not just newcomers building aggregators. More and more insurers are looking to set up their own. According to a recent survey of insurers done by Accenture 57 percent of insurers surveyed were currently considering building aggregator sites, even if it meant listing competitor’s prices alongside theirs.
So the question remains, how will these sites affect advisers? Traditionally, consumer tend to resent the existence of any kind of middleman. As we move further into an error defined by direct access to goods, services and information, advisers can be seen as unnecessarily increasing costs and the potential for human error. Consumers now feel empowered. They’re able to research and purchase the best possible headphones, B&Bs, moving companies and flights online, so why not insurance?
Some have voiced concerns that aggregators and digital sales could start to encroach on the market served by advisers. The reality is though aggregators and advisers, at least good ones, serve different markets. In fact aggregators are much more likely to increase the market as a whole, as they reach customers who have been underserved by a more traditional model.
Conor Sligo, General Manager at life insurance aggregator Life Direct says the difference is clear “Customers who use aggregator sites are not looking for advice, nor do they want to sit down with an adviser face to face.” They have more simple needs and a desire for complete visibility of their options.
Of course, the full complexity of life insurance can’t always be fully expressed by aggregators, and some customers needs are much more complicated. In those cases Conor says, the role of the adviser is still very relevant, and they will recommend a customer seeks one out.
According to Conor, “advisers who are threatened by aggregators tend to be those that don't have a very compelling value proposition. Those who see their role as simply providing access to insurance products (being a gatekeeper), giving a few quotes and making a sale, and that is no longer enough.” Customers can now find information and even purchase online.
And insurance aggregators are only the beginning. The entrance of roboadvice is going to further compound the need for advisers to better understand how they add value, as customers gain even more access to information and products.
Good advisers know that their value to clients is in being a trusted adviser - the products they offer are secondary to this core value proposition. When done well, the role of the adviser will continue to be valued by consumers who need help navigating the sometimes complicated and difficult task of purchasing life insurance.