The last few years have seen a steady increase in the number of price comparison websites. These provide a simple way to compare prices of various products or services from different suppliers. This is meant to save you time because they do the legwork for you. They provide you with all the information in one place, and sell policies directly to the customer. This is a good business model and the advertising campaigns have definitely been catchy.
Surprisingly, though, while these websites seem to have taken the UK by storm, EU consumers are not as convinced.Less than 10% of car insurance policies are sold through price comparison sites. Instead, the motor insurance brokers of continental Europe have been better able to adapt to the needs of the market. Effectively, European customers prefer to deal with a broker or middleman instead of dealing directly with the insurance provider.
In fact, research has shown that while these customers are making use of brokers, they are still using comparison websites, but for research purposes. When it comes to actually buying the insurance, they prefer closing the deal with a real person rather.
Why brokers?
Trust is a major issue that consumers have with price comparison websites, indeed anything web-related. While consumers may be willing to use such a website for research purposes, trust issues may prevent them from actually spending money on the product. This is especially true for insurance policies, which people think are complex and difficult to understand.
What’s more, consumers may feel there are hidden clauses in the policies sold on price comparison websites, whereas a broker should be able to answer any questions you may have. Websites can be confusing and even though there are help options, not many people take the time to use them, preferring instead to speak to a person.
Personalised service
It is easy to understand that using a price comparison website is a good idea if you are looking for a generic, standard policy. However, if you need something specific and unique to your circumstances, speaking to a person makes more sense. Insurance brokers are experts in the field. They answer your questions on the spot and work with you to identify which insurance policy is right for you.
Even though it may seem like using a website is simpler and more convenient, brokers offer a streamlined process. Instead of having to sift through a range of insurance options, brokers suggest policies based on your individual needs.
Money well-spent
Distrust comes into play again in terms of cost. Consumers assume (and rightly so) that these websites need to be making a profit out of their services. In fact, this profit is in the form of commission for each consumer who buys through their website. This commission is incorporated into the costs borne by the consumer. So while the price comparison website may be saving the consumer money by showing the different price options, this is negated by the fact that an added cost has been included.
This is just one reason making use of a broker may actually be a cheaper option. Insurance companies tend to offer brokers lower rates which they offer to their clients. This is usually because of the expertise they bring to the job. Because brokers are experienced in the field, they can promote policies which are suitable for a specific individual. They won’t be tempted to underinsure, so there is a lower risk of unnecessary claims in the future. Ultimately, this ends up saving the insurance companies money.
In this day and age when everything seems to be becoming more technological and the internet is becoming the go-to place to do anything from opening bank accounts to buying a house, it seems there is still a place for the traditional salesman when it comes to insurance. Sometimes we actually don’t want to deal with technology but would rather deal with a person and the insurance market reflects that.