The Rise of Insurance Aggregators and their Impact on Your Business

September 23, 2021
The Rise of Insurance Aggregators and their Impact on Your Business

According to McKinsey, almost 50% of online insurance in Europe is sold via aggregators. Insurers can’t stay aside anymore and need to adapt to the market change. To do this, they need to understand the business models of insurance aggregators, the ins and outs of their performance, and the customer needs they meet. Aggregators help insurance expand their customer reach, enter new markets, and become more competitive in price and product performance.

What are insurance aggregators?

Let’s start with a simple definition of what is an insurance aggregator. An insurance aggregator is a group of independent agencies that unite to give its members more benefits than individual agencies can allow. Briefly speaking, one can compare insurance aggregators to the online marketplace, where customers compare product features, carriers, coverage, and price. We hope that this insurance aggregator definition is clear enough.

The rise of insurance aggregators is completely reasonable. Insurance aggregators allow customers to get insurance quotes in just one click and compare the options before choosing. In such a way, a person doesn’t have to search each website individually and spend a lot of time to find the best insurer.

As for the companies, they use insurance aggregators to generate leads and break into the new markets. Also, aggregators analyze the market regularly, so they always have fresh insights into customer and product data, which gives companies a chance to discover new customer segments, respond to new trends, and test new products.

To better understand the aggregators, let’s take a look at the aggregator model.

Image by Proxet. Aggregator Business Model
Aggregator Business Model

Here’s how it works:

  • Aggregator gets in contact with the provider, offering a partnership plan.
  • Providers and aggregators sign up contracts, becoming partners.
  • Aggregator creates a network of partnerships.
  • Aggregator invest in a great marketing strategy to empower its brand.
  • Users attracted by aggregator’s promises buy through its platform.
  • Partners get their customers, and an aggregator gets its commission.

The benefits of joining the aggregator are the following:

  • Market overview
    Customers can quickly compare prices and policies, such as premiums, terms & conditions, benefits provided, coverage, etc.
  • A chance to purchase insurance online from anywhere
    There is no need to visit your insurer offline and spend a lot of time looking through the documents and invoices with aggregators. You can purchase a policy with just one click.
  • Agencies that join aggregators get a chance to enter new markets and network with peers
    Insurance aggregators provide you with access to the carriers and give you such benefits as networking with other professionals, visiting learning events and member meetings, and feeling the support of the people from your industry.
“In my view, insurers should view aggregators as an additional distribution channel—with its own unique characteristics—and then consider strategies for maximizing the value of the channel.”

Erik J. Sandquist, Managing Director and Leads Accenture’s global Insurance Distribution and Marketing Services.

However, sometimes aggregators can struggle with attracting new insurers and meeting their business targets. That’s why different aggregators come together to form an agency aggregator. Let’s learn more about insurance agencies in the next chapter.

What is an insurance agency, and how it works

So what is an insurance agency? An insurance agency is an individual or company that sells the insurer’s products in exchange for compensation. Independent agents usually provide products from various carriers, whereas captive or exclusive agents only sell the products of one insurer.

There are mainly two types of insurance agency: independent agents and exclusive agents. Independent agents do not usually relate to one company and sell insurance and products from different companies and carriers. Exclusive agents are authorized to sell insurance policies of a single insurance company and are limited to a single carrier. That’s why it’s better to contact independent agents, as they provide more coverage options and possible policies.

Here are the other benefits of working with an insurance agency and making the most out of insurance data.

  • Agents can compare the prices from different insurance companies to provide you with the best deal
  • Independent agents are an all-in-one stop for every kind of insurance you need - from home to health one
  • Personalization. Your insurance agent knows your goals and needs and manages your coverage so that you keep your premiums as low as possible
  • Independent agents will answer all your questions and help you get through the complicated contract to avoid hidden surprises.
  • Business coverage. Insurance brokers deal with every aspect of your business and have access to different policies.
  • Claim assistance. The broker can also be your advocate during the process of claim settlement. In such a way, you avoid any legal costs, and it’s in the broker’s interests to promote a quick settlement of any claim.
“Insurance brokers strive to build relationships rather than simple transactions. An excellent benefits consultant should contact you multiple times throughout the year to check in and answer any questions you may have.”

Alex Olson Marketing Director at The Olson Group

So why should you trust insurance agencies? In top insurance aggregators, brokers get a commission from the insurance company for referring the customer there. So be sure that there is no financial incentive to recommend a specific insurance provider for you, so the agent chooses the best company for your coverage.

How health insurance aggregators work

Medical providers of all types, from hospitals to pharmaceutical companies, to private practices, generate enormous amounts of data. There are the following types of best insurance aggregators:

  • Price-comparison only
    These aggregators provide a simple comparison of prices in one place via ads or listing fees.
  • Lead-generation only
    Here, health insurance aggregators generate leads and sell them to brokers or product providers.
  • Broker
    Apart from lead generation, some health insurance brokers provide digital advice and recommendations.
  • Product provider
    Here, an aggregator provides coverage that is more attractive to the customer segments. These products are usually white-labeled at a lower price compared to the providers’ own brand.

Here are the main benefits of aggregators for the health industry and the aggregator meaning:

  • Reduction of compliance costs for the health insurance aggregators. As health insurance is not a financial product, there is no need to disclose commission terms to the customer, which helps aggregators with contracting insurers.
  • It’s easier to understand complex healthcare products and health risks. The aggregators help increase transparency in the healthcare industry, as aggregators often explain all the approaches and processes.
  • Aggregators provide regional insurers to customers outside of their local region. These insurers have a limited market reach and high costs of expansion. So aggregators help them reach new customer segments without the need to build their own brand.
  • As customers have complex relationships with any insurance products, they mostly purchase PHI for a specific health need or tax purposes. So there is a need to develop broader long-term relationships between insurers and their customers. That’s one of the benefits aggregators provide.
“In many industries, data aggregation is becoming a must-have to stay competitive. The health industry is not an exception. By gathering the data of numerous similar cases, doctors can improve their treatment methods to accelerate the overall healthcare facility. That’s why it’s crucial to aggregate healthcare data.”

Vlad Medvedovsky, Founder and CEO at Proxet (ex - Rails Reactor), a company that provides software development services for different industries

Examples of best insurance aggregators

Now let’s take a look at the examples of aggregator sites to better understand how they work.

Asnoa - the independent insurance aggregator

The Agent Support Network of America (ASNOA) is a fully integrated service and support provider that helps independent insurance agents grow their businesses. Here’s how it works:

  • First, you should contact their sales department. Their sales team can help explain more about our company and what the ASNOA Advantage really is.
  • Second, you sign the contracts to begin working together.
  • Third, you coordinate with their licensing and agency services team to set up carrier appointments so you can get back to writing business right away.
  • Fourth, you work with each department to set up your systems, train you and your staff, market your business, and grow sustainably.

Cometinsure - a platform that helps you easily compare quotes from the most trusted insurers and all-year support.

The company provides information on the following types of insurance: health, bike, travel, home, cargo, etc. Its features include:

  • Insurance manager - Perform tasks such as policy issuance, endorsements, report claims, policy records, access reports, and a lot more.
  • Claims support - Comet provides door-to-door claims support and claims experts advice to ensure your satisfaction.
  • Academy - Anything you wish to know about insurance, our professionals are here to guide you

United Group Alliance - leading online aggregators insurance

United Group Alliance is a top insurance aggregator by offering stability in a changing marketplace and the opportunity for rapid growth. SIAA members can attract quality producers and have the clout to compete against agencies of all sizes successfully. It provides its member agencies with:

  • Insurance
  • Access to top-rated regional and national carriers with no minimum premium requirements
  • Direct Carrier Appointments
  • Direct relationship with carrier underwriters and marketing staff 
  • Preferred agency contracts
  • Exclusive and ongoing development of programs
  • Assistance with pricing and placement of all lines
  • Perpetuation planning assistance
  • Large account placement guidance
  • Ongoing updates, meetings, and tradeshows
  • Automation and other vendor discounts
  • Alternative perpetuation option

Unlike other networks and insurance aggregators, their member agencies who enter the insurance aggregators list are paid 100% commission directly by the carriers they represent. You get instant access to the strategically selected group of top national and regional insurance companies by joining Alliance. These elite carrier partners allow our member agencies to compete with the big boys by offering their clients flexible coverage options and the most competitive rates. Their members include former agents, top producers, independent agents, and even newcomers.

Insurance data aggregators are on the rise. At Proxet, we have deep experience in helping organizations leverage the power of real-time data. If you consider upgrading your company’s ability to analyze and act on large volumes of information, please get in touch.

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