COVID-19 recession will increase the popularity of price comparison sites
With the UK economy officially in recession as a result of the coronavirus outbreak, consumers will spend less due to job cuts and uncertainty about the future. As a result, price comparison websites (PCWs) will become more popular as individuals look to save money wherever they can after COVID-19.
PCWs are very popular among UK consumers when purchasing insurance. The websites allow individuals to quickly compare prices across a number of insurance products from different providers in the market.
31.3% of motor insurance sales are directed through a PCW, according to GlobalData’s 2019 UK Insurance Consumer Survey. PCWs also account for 26.7% of home insurance sales and 22.3% of pet insurance sales. While the direct channel is still the most popular across these three lines of business, PCWs will gain ground as consumers seek the best deals for a given insurance product.
However, travel insurance may be one line where the opposite occurs, with price comparison sites seeing less traffic as consumers value extensive cover to protect themselves against coronavirus-related events more than the price of a policy.
Aviva, the UK’s largest general insurer, is noticeably absent from the four largest PCWs (Comparethemarket.com, Moneysupermarket.com, Confused.com, and Gocompare.com). The provider removed its products from aggregator sites in 2008 in order to focus on its direct sales. However, the insurer is planning to feature its motor insurance policies once again on aggregator sites after an initial pilot with Confused.com in June 2020. Aviva also plans to feature its home insurance policies on aggregator sites later on in 2020, recognising the viability of the distribution channel.
While economists predict a return to growth in 2021 as the UK adjusts to a new normal, price comparison will likely enjoy a period of increased traffic from consumers in the near future due to COVID-19.