The Rising Importance of Aggregators in Insurance
Distribution in insurance has gotten more sophisticated over the years. On top of traditional players, a great number of nontraditional channels have appeared. The Internet has enabled new players, spurred new business models, and become an important distribution channel.
A few years ago aggregators entered the picture, some as new players and others as offspring or extensions of brokers and producers. In Latin America aggregators are operating in 90% of the countries (18 out of 20).
Celent sees aggregators as an interesting phenomenon that could change business models in cases where low value is perceived, though competing with other channels such as banks and retailers with similar online capabilities.
The report The Rising Importance of Aggregators in Insurance discusses aggregators operating in Latin America, their importance, background, availability, breadth of offering, processes, and lines of businesses.
Aggregators as we know them today are an incipient way of competing with producers, retailers, and banks, although some of these may establish an aggregator site as part of their digital strategy. They look nice because they are born digital, but they seem simple, just a comparison site, and therefore they do not fulfill a trusted advisor role.
“The presence of aggregators forces insurers to rethink many aspects of their strategy,” says Luis Chipana, an analyst with Celent’s Insurance practice and coauthor of the report. “Insurers need to consider how this channel fits their overall strategic positioning and value proposition.”
“The arrival of aggregators brings transparency to the market and gives customers a simple way to shop around,” adds Juan Mazzini, a senior analyst with Celent’s Insurance practice and coauthor of the report. “Other channels, or even insurers reaching directly to customers, need to figure out where and how they will add value; otherwise they will lose to low-cost, simple, transparent sale outlets such as aggregators.”