Price comparison sites are stuck. It’s time to step up — and get smart.
In the nineties, UK shoppers found themselves hundreds of pounds better off thanks to the latest internet revolution: the price comparison website (PCW). Cut to twenty years later, and the PCW’s business model has succeeded in… staying exactly the same.
Price comparison websites were once the innovators in the insurance space. But they stopped innovating a long time ago — aside from becoming more sophisticated in their marketing tactics.
They help you find the cheapest product, but you’re still on your own when it comes to choosing which one to buy. The neverending list of results are still ranked solely on price, not on how well the products fit your needs. You still have to fill out a lengthy form, and you’ll still probably have to seek independent advice if you don’t fit into their pre-set fields.
Price comparison websites do a very good job of just that: comparing prices and saving you money. This is fine when you’re buying low-commitment insurance products with a yearly renewal, like home or car insurance. But with more complicated policies, our user research shows that most people are unsure if they’ve bought the right product and are left to ‘hope and pray’ (their words) they’re covered.
Now, the entire PCW business model is challenged. New technology and smart data science open the possibility for a much more intuitive and personalised service that works harder for the customer.
The question is: who will innovate first?
At Anorak, we’ve decided to move things in the right direction starting with one of the most misunderstood products out there: life insurance.
In the UK, we’re massively under-protected when it comes to life insurance. Around 8.5 million breadwinners don’t have a policy in place, leaving millions of families at risk if the unexpected happens.
The whole conversation comes back to awareness and education. Life insurance is a complex and varied product (as the team at Anorak know first-hand, having analysed thousands of pages of insurance policies). And it’s often a one-time purchase intended to last you for 25 years or more. For a commitment this big, it seems illogical to buy a policy purely based on price. It would be like buying the cheapest flight to the Caribbean without checking it had four stop-offs and took a week to get there.
When we buy life insurance, the question shouldn’t be ‘What’s the cheapest policy I can get?’ but ‘What are my unique needs and what policy should I get to fully cover them?’
The problem is most of us don’t know what we need. That’s where Anorak comes in. Using actuarial expertise, advanced data science and machine-learning, we give everyone access to tailored advice about their life, their risks and the best policies out there to protect them. The goal is not only to find you the right cover at a price you can afford, but to give you the knowledge to make the smartest decision about how to protect your finances and family.
And while we still scan the market, it’s just one part of the companion service we provide. We explain everything in plain English, we highlight any exclusions or clauses you need to be aware of, and we don’t put any pressure on you to buy.
A true companion can only work if they’re 100% transparent. That’s why we don’t favour one insurer over another, why we proudly work to industry-regulated standards (FCA), and why we only offer advice based on your unique circumstances. So if you don’t actually need life insurance, we’ll say so.
So, what’s next for the insurance market?
With technology like smart data and open banking disrupting the market, the PCW business model faces challenges both from new players and pre-PCW advisers who were pushed out during the .com boom. The winners will be the ones who can use this technology intelligently and responsibly, providing a more meaningful service for their customers and becoming a trusted adviser. We believe the future of insurance is one where everyone knows exactly what they’re buying, and why. It’s time for a better deal.
Interested in working together to build the future of life insurance? Drop me a message or leave a comment below.
#insurtech #fintech #lifeinsurance #openbanking #financialadvice
