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Apr 2024

The rise and rise of online aggregators

Source: Middle East Insurance Review | Mar 2020

Ms Ambareen Musa of Souqalmal.com reviews the impact and viability of insurance aggregators in the Middle East as the UAE market sees a spike in the number of new entrants.
 
 
Aggregators are changing the insurance landscape in the UAE. With every mainstream insurance product, including car, home, travel, and health insurance available through a few clicks on a smartphone or laptop, we are witnessing a new level of ease and transparency that is transforming the way people buy insurance in the country.
 
What’s in it for customers?
Comparison-shopping is easily the most effective way to choose a product or service that is ideal for one’s specific needs, while allowing the consumer to get the best value for their money. Take any insurance plan that is a year-long commitment for instance, be it car, health or home insurance. Ending up with the wrong cover can have huge financial implications. 
 
An insurance comparison and purchase platform appeals to customers for a number of reasons. It is great for time-crunched users who do not want to go through the lengthy process of reaching out to individual insurers for quotes. Aggregator sites are quickly becoming the reference point for users who want to compare multiple insurance quotes, and buy their policies online from the comfort of their homes or offices.
 
Here is an example closer to home. On Souqalmal.com, customers enjoy an end-to-end online search-and-purchase journey. It all starts with a simple and user-friendly form that barely takes a minute to fill (Figure 1).
 
Finding cheaper car insurance
 
Once that is done, the platform instantly generates multiple quotes from leading insurance providers. On the results page, users can review every policy’s premium, coverage and benefits, and how it stacks up against others. Users can also select optional add-on features at this stage, allowing them to customise their insurance coverage (Figure 2).
 
Customize your plan
 
Once a customer is ready to select and buy an insurance product, they can review their chosen policy before paying for it. This bit is as transparent as it gets – consumers can go through exactly what is included in their policy and what is not. Next, they can use a payment method of their preference (credit card, debit card or a monthly installment plan) to make the purchase. 
 
Once all supporting documents have been uploaded into Souqalmal.com’s database, the policy will be issued and emailed to the customer – all within 60 minutes.
 
The entire process is seamless and secure, and there is even the option of renewing a policy with an existing insurance provider, saving and retrieving insurance quotes and having a Souqalmal agent assist you on the phone or through WhatsApp.
 
What’s in it for insurers?
While customers rake in the rewards of comparison shopping, insurers stand to benefit in a big way, too. Insurance aggregators have proven to be a very effective sales and distribution channel both locally and globally. By partnering with aggregators, incumbent insurers get the digital advantage, which can help expand their reach and market drastically. 
 
The aggregator model also allows insurers to unlock the repeat business opportunity through automatic renewals. Further, insurers can use the aggregator’s vast repository of valuable data on customer demand and purchase behaviour to develop new products and services that meet consumers’ needs.
 
Growing interest from all quarters
Over the last few years, there has been a noticeable spike in the number of insurance aggregators entering the UAE market. Souqalmal.com was one of the first to enter the insurance aggregation business in the region in 2016, after successfully establishing its presence as a banking and personal finance comparison portal in the UAE and Saudi Arabia. Once the insurance engine was up and running, it did not take long for Souqalmal.com to become one of the most recognised and trusted insurance aggregators in the region. The platform’s instant quotes, side-by-side comparison feature, and coverage customisation options, have introduced customers to an unprecedented level of ease and convenience.
 
The best proof that the formula indeed worked was a growing interest among regional and global investors who wanted in on the local action. This became obvious around the time when Souqalmal.com was raising its Series B round of funding, nearly two years back. The round that helped the company rake in an investment of $10m made headlines across the region. Saudi Arabia-based Riyad TAQNIA Fund (RTF) led the funding round, which saw two major investors also enter as strategic partners – UK’s leading financial aggregator GoCompare along with local exchange and remittance heavyweight UAE Exchange. 
 
RTF’s participation helped Souqalmal.com build a concrete plan to expand its footprint within the GCC, especially in Saudi Arabia. And with GoCompare coming on board as a strategic investment partner, Souqalmal.com was now able to leverage the former’s technological know-how and expertise to bring its insurance platform on par with the best in the world. 
 
But it was not just about newer players entering the market and increasing investor attention. The region’s financial regulators and startup support community contributed immensely towards helping next-gen InsurTech players enter the market. The most recent example of this was the Central Bank of Bahrain (CBB) making sweeping regulatory changes to allow the entry of insurance aggregators in the kingdom. Souqalmal.com became the first-ever company to be granted an e-broker licence by the CBB in June 2019. 
 
Inspiration from global success stories
Globally, the aggregation business has seen the most success within the insurance industry. According to a 2018 study by McKinsey & Company, insurance products account for over 75% of European aggregators’ total revenues. Further, in countries like the UK, Germany and Italy, aggregators made up over one third of the market in terms of GWP in 2017. 
 
The UK’s case is particularly striking. Aggregators claimed a market share of over 50% in 2017. Another 2016 report on the UK insurance market published by Accenture showed that aggregators accounted for 60% to 70% of new premiums in the retail motor insurance market alone. 
 
Leading aggregators in the UK like MoneySuperMarket, uSwitch, GoCompare, CompareTheMarket, and Confused.com have all become great success stories and for good reason. 
 
Strong branding initiatives have now made every top aggregator a household name in the UK. According to a 2016 report by the Read Group, traditional insurers’ brand awareness was found to be significantly lower than that of leading online insurance aggregators. The majority of Brits (80%) were familiar with brands like Comparethemarket.com and Gocompare.com, while only one third had heard about companies like RSA and AIG. 
 
A promising future 
Aggregators help open up the market, bringing with them an unmatched level of transparency. Within the insurance industry, it promotes healthy and fair competition in terms of pricing as well as product superiority. 
 
With more and more insurers seeing the expanding benefits of collaborating with aggregators, we foresee an insurance industry where the threat of competition gives way to collaboration. 
 
Recognisable brands, coupled with state-of-the-art technology and seamless user experience, as well as an increasing number of partnerships with insurers will help equip local and regional aggregators replicate the success achieved by global players. M 
 
Ms Ambareen Musa is founder & CEO of Souqalmal.com
 
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