Confused.com's clash with Norwich Union has pushed aggreagtors back into the consumer spotlight
Nothing in this world comes free.
That’s the argument made this week by aggregator Confused.com justifying the introduction of fees charged to insurers listed on its panel.
Aggregators use expensive marketing ploys to draw customers to its price comparison websites - convincing searchers it’s the best means to secure the cheapest and most suitable policy.
Insurers are then given access to these eager consumers through an endless array of quotes.
The entire process costs substantial amounts of money aggregators argue - enough to warrant a £7,500 to £15,000 monthly fee in the case of Confused.com.
And if insurers, who aren’t willing to cut back on overhead costs and make their rates and brands more competitive, cannot nab a sale, why should aggregators go without?
The difficulty is, when insurance powerhouse Norwich Union recently dug in its heels and said it strongly disagreed with the fees, Confused.com acquiesced.
The company has decided now to renegotiate with each client on an individual basis, charging fees – in some cases - on a cost-per-sale ratio. This means it is the smaller niche insurers that receive less quotes that could be stuck with the bill.
One private motor insurer that is currently negotiating a spot on Confused.com’s panel worries because the company is not a recognized brand it will have a relatively low conversion rate leading to hefty fees that may become unsustainable.
The argument for aggregators has always been that they allow customers an abundance of choice and access to a wide selection of insurers.
If insurers remove themselves from the sites, what will that mean for the credibility of aggregators?
Will clients still be matched with the best policy or merely the only one available?
Aggregators themselves can’t seem to agree, with some defending the decision of Confused.com to implement fees as a matter of sustainability, and others decrying the move as a step back in the ongoing battle for transparency.
If insurers are charged a fee or commission for being listed on a panel, customers must know that otherwise, aggregators could lose credibility and be accused of highlighting products carrying a greater commission rather than pointing customers towards the best deals.
Regardless of the system aggregators use to charge companies for its services, it must be crystal clear what it is customers are getting.