Insurance brokers must up their game to compete with aggregators
Last updated on September 25th, 2019 at 4:51 am
Online comparison sites are the biggest business threat to insurance brokers – and brokers need to provide excellent customer service to compete, according to a study by Aviva.
The response from broker customers was that level of service was a main driver for using their businesses and two out of three customers (62%) felt they provided service that was unavailable online or directly from insurance providers.
The good news was one in three customers (33%) believed the internet was the best place to look for general insurance.
Customers told Aviva that 35% of car insurance buyers and 28% of home insurance customers were confident that a broker could find them the best price, while 46% of car insurance customers and 39% of home insurance customers considered brokers would also find them the best deal.
Sam Hudson, head of broker personal lines at Aviva, said: “Notwithstanding the explosion of insurance aggregators, customers still value the relationship they have buying their personal lines cover through intermediaries. Consumers value telephone and face-to-face advice to help them negotiate their way through the vast array of insurance products available to them and it’s clear that brokers provide the reassurance they need.
“As well as valuing their broker, customers are extremely loyal. The average customer has been with their broker for nine years. And while one-in-seven respondents say that the amount of insurance they put through their broker will increase in the future, only one-in-ten believes it will decline.”
The top three reasons persuading people to shop with an insurance broker were price, ease of doing business and good customer service.
On the downside, the survey revealed that despite the praise, many customers still felt brokers could improve their service in some areas.
Customers cited an out-of-hours phone number, regular insurance reviews and tailored bundled car and home insurance packages as the top issues on their wish-lists rather than the broker choices of added services like optional policy add-ons, alternative policies and face-to-face dealings.
Mr Hudson added: “With about three-quarters of customers saying their broker treats them as an individual, providing peace of mind and flexibility, there’s no doubting the value of the bespoke and personal service provided by an intermediary. However, it’s also clear that there are other services brokers could offer that customers would value.”