What are the advantages and disadvantages of comparison sites?

Image of Best priceThese days comparison sites are everywhere; you can barely turn on your television, listen to the radio or browse the internet without some sort of advert popping up. One of the reasons these types of sites have become so popular over the years is because they offer a beneficial service to customers and promote themselves as a way to save money.

As an insurance broker you may therefore have already thought about signing up to a comparison site in order to receive extra leads, however before you do so it’s important that you consider the advantages and disadvantages. So here we break down some initial information on comparison sites and what they can potentially offer you:

Advantage: More Leads for Little Effort

One of the main reasons brokers and underwriters sign up to price comparison sites in the first place is so that they can gain extra leads without having to dedicate a large amount of time or resource towards it. If you specialise in mainstream insurance products you may therefore benefit from signing up to a price comparison site, especially if you are a small company with a limited amount of staff.

Disadvantage: Lower Profit Margins

Even though price comparison sites can provide you with extra leads, you have to pay for this service meaning you make less per policy. This is where you need to make sure you have a good grasp on your loss ratios and commission payments for each of your products so you can ensure your profit margins remain stable. Furthermore, you should research the fee each price comparison site will take on a product by product basis before signing up as you may find that some sites are cheaper when it comes to certain types of policies.

Advantage: Customers are ready to buy

One of the biggest challenges for insurance brokers is that their customer’s only buy policies once a year which means you only have a small window of opportunity to catch them when they are ready. Even though customers sometimes use comparison sites to get a quote without the intent of buying straight away, most people who use comparison sites are ready to buy a policy right there and then. This means that the leads you receive are more likely to convert straight away with little interaction required from you.

Disadvantage: More Competition

Most people don’t know as much about insurance as brokers or underwriters which means that they are more likely to buy from a brand they have already heard of even if they offer less extensive cover. This means that even though a price comparison site gives you more visibility you will be up against some of the best-known brokers and underwriters in the country. This is why you need to make sure that your ad-space shows customers all the benefits of your insurance policies as clearly as possible. Luckily, most comparison sites have “tick boxes” showing what extras you provide; however for full policy details customers will still need to click through to your site.

As with most things, price comparison sites have both advantages and disadvantages for insurance brokers and underwriters. There is no denying that these types of sites are popular for a reason, however you need to make sure you do your research before signing up to one.

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