With the exception of the health sector, major insurers are unlikely to jump on the comparison website bandwagon any time soon, according to analysts.

Commonwealth Bank analyst Ross Curran says until there is a “level playing field” on such sites, Australia’s leading insurers will not play ball.

He says comparison websites are to be encouraged, because they simplify products for customers, but they are not necessarily “a great thing for operators”.

“It makes sense that I’m going to come up with a bunch of homogenous things, but the problem is comparison websites get paid $700 for pushing plain vanilla products to mum and dad investors at what should be a fraction of that,” Mr Curran said.

“The big four underwriters are properly regulated and properly capitalised and they need to get a return on that capital.”

JP Morgan analyst Siddharth Parameswaran agrees, saying it would take a couple of big underwriters to join in for comparison sites to gain traction.

“They [the big insurers] don’t want to pay 15% to someone if they can sell it themselves,” Mr Parameswaran said.

Mr Curran says the problem with comparison websites is products seem identical, but one may be from a regulated, properly capitalised company while the other is from a “fly-by-nighter”.

He says big insurers do not want to “legitimise these $2 shops”.

Australian insurers have learned from the UK, where motor and home insurers participate heavily in comparison sites and have seen their brands compromised as a consequence. “Their brand equity has shifted from the underwriter to the distributor,” Mr Curran said.

Wilson HTM analyst Stewart Oldfield agrees.

“The major insurers have invested millions in their brands and are not keen to see that diluted by comparison sites,” he said.

Big insurers are keen to protect their market shares, “which is pretty understandable”.

“You are likely to see some smaller players be more willing to embrace the comparison sites because they have less market share to protect and are more focused on growth,” he said.

Credit Suisse analyst Andrew Adams believes large insurers may be reluctant to join aggregator sites because of the instability they are suspected of causing in the UK insurance market.

Mr Adams says commoditisation of products led to volatility and big swings in UK home and motor.

He says major insurers here are increasing their market shares without the help of comparison sites.

They are aware of the trend to purchase insurance online, so offer their products on their websites.

“We see a place for aggregator websites,” Mr Adams said. “Health is more a commoditised product, especially with the tax system. People are forced into that.

“People are buying health insurance because the rebate forces them to. It’s almost compulsory for half the population, therefore we see a role to play for aggregators in those products.”

Mr Adams says there is also a place for aggregators in “simple, low-level direct life”, but more complex life products need a broker.