Insurers at risk of comparators ‘dependency’
The Geneva Association has warned the growth of comparators and online platforms such as Google and Amazon has implications for insurers and consumers.
These tech-driven channels may have brought convenience and other benefits, but there are trade-offs, the think-tank says in a report.
For insurers, it could mean they may cede control over the way products are sold.
“[Online platforms] provide a way for insurers to differentiate themselves… on the other hand, the ability of online platforms to observe all transactions effectuated on the platform may create an information advantage of platforms over [insurers],” the association says.
“As a consequence, insurers may become dependent on large platforms that are able to extract an increasing share of the added value.
“Furthermore, online platforms may promote an overemphasised focus on price competition, making it difficult for insurers to promote features that could add value to individuals and society, such as loss prevention services.”
Information accuracy and privacy are key issues for consumers in the digital economy, where more than 60% of buyers worldwide rely on Google, comparators and other websites when they shop for insurance products.
In the UK alone, at least half of all motor policies are sold via comparators.
“Oversimplification and biased information imply that search results, rankings or other information may not necessarily reflect individual user preferences.
“The use of large amounts of personal data gives rise to a trade-off between the benefits of Big Data analytics and individuals’ privacy.”