Directions to gain a comparative advantage

The number of people using price comparison sites for car insurance has risen significantly over the past year. New research identifies four user types to help marketers understand different behaviours and develop retention strategies. 

Aleksandr Orlov, Gio Compario and Brian the Robot are characters that have helped the value of the UK’s car insurance industry to a total of £8.6bn annually and it seems their attention-grabbing habits are encouraging more people than before to shop around.

Compare The Market, GoCompare and are among the comparison websites that have helped 44 per cent of UK consumers to arrange new policies in 2013, compared to 33 per cent last year, according to the latest data from GfK’s Financial Research Survey.

“This scale of change is quite significant in financial services,” says Nick Watkins, managing director of financial services at GfK, adding that the rise has been fuelled by an increase in advertising by the major players.

“Motor insurance, like other financial services products, is a low engagement area. Consumers aren’t particularly interested and don’t always want to spend time on it, so something that [does the work for them] is appealing,” he adds.

However, although the use of price comparison sites is widespread and 52 per cent of car insurance customers are likely to use one, only 40 per cent of consumers trust them. Watkins says this can be explained by the way they are used.

“Consumers know the sites won’t include every brand and that there might be a commercial aspect to some of the listings at the top, but despite this they still feel they will get a much better deal than if left to their own devices.”

Consumers are much more tech savvy but time poor. Price comparison sites sit nicely between those two trends

The way in which comparison sites are being used varies greatly, so marketers must understand the different behaviours being displayed in order to develop the most relevent strategies for long-term retention.

The research reveals four key consumer types – those who are ‘newbies’, inert, time-poor pragmatists and hobbyists – each of which shows different characteristics in how they approach the category and their ability to make decisions.

Newbies and inert consumers both lack confidence. For newbies, it is because they are buying a policy for the first time, while inert consumers lack confidence in their understanding of the market and are disengaged, so shy away from making financial decisions.

Time-poor pragmatists and hobbyists are the most active groups, says Watkins. Time-poor pragmatists want the best deal without spending hours doing research, while hobbyists devote 
a lot of time finding the best financial products and pride themselves on their knowledge.

“Time-poor pragmatists need to check they’re getting a reasonable deal, so price comparison sites are good as they enable them to quickly get a handle on whether the price they have been quoted is fair,” says Watkins.

The research refers to ‘Kate’ as a typical time-poor pragmatist. Her purchase journey begins when she receives a piece of direct mail from Aviva, just before her renewal from LV= is due. She calls Aviva to find out about the offer, but the quote is higher than her existing premium. She then visits three other insurers’ sites, and price comparison sites. As she cannnot easily get a better deal elsewhere, she lets her policy with LV= renew automatically.

“Insurers have taught consumers this behaviour and it will be quite difficult to undo,” says Watkins. He suggests brands look at other ways of encouraging consumers who do call to stay, rather than only dropping the price.

“Brands also need to be aware that even though they see people renewing on their databases, many have done research to check they are not being ripped off.”

Brands should not therefore assume those customers are loyal as they would have changed provider if a better offer was easily available. The number of customers who research alternative quotes but stay with their provider is almost the same as the number that switch, according to the study.


Hobbyists spend the most time doing research in order to find the best deal, which is partly because they have more spare time but also as a result of their attitude. They look at many different resources, including price comparison sites, to find the best possible quote each year (see case study below).

As a result, they are not a particularly loyal group and will often change insurance provider on a yearly basis depending on who has the best deal.

The way in which hobbyists use advice sites, such as Money Saving Expert and Which?, also differs as they tend to visit them after they have done their research in order to validate their findings and check they have not missed better prices. However, newbies use them at the beginning of the purchase journey to find out about the category.

The popularity of online review sites has grown over the past year – 25 per cent of consumers who switched their insurance provider visited Money Saving Expert two months before renewal, although not necessarily only for information about motor insurance.

The site is used almost as much (22 per cent) by those who renew with their existing provider but shop around to ensure they cannot get a better quote elsewhere.

Independent advice sites are also good news for insurance providers that do not work with price comparison sites too as they advise consumers to look at insurers’ websites directly, as well as checking comparison sites, to get the best deals.

But as the popularity of price comparison sites continues to grow, insurers that are not involved will have to work increasingly hard to stand out in consumers’ minds, says Watkins.

“These brands need to get their voices heard to encourage consumers to look at them as well,” he adds. “As more of the market moves towards arranging motor insurance via a price comparison site, they will have to make sure their hat is still in the ring.”

A hobbyist’s journey

As part of its research GfK followed the purchase journey of hobbyist ‘Alan’ who is “comfortably retired” and has an existing policy with Saga.

Before beginning his research Alan clearly sets out a list of requirements including a protected no claims bonus, legal expenses, windscreen cover and the option to pay monthly.

He receives a renewal letter from Saga offering him a new premium for £390, but before making a decision he spends the next 29 days carrying out further research.

During this time he visits seven other insurers’ websites, including seven separate visits to Hastings Direct, as well as making multiple visits to price comparison sites, and he also makes at least one phone call to Saga.

In the end he renews with Saga, but manages to get the price down to £326, saving him £64 which he sees as a successful outcome.

“This is an interesting case because although he goes to Hastings Direct many times he doesn’t actually switch,” says Nick Watkins, managing director of financial services at GfK.

However, although this purchase journey is somewhat extreme, it is not atypical for the category. Hobbyists do tend to be ‘serial switchers’ though, he says, and suggests insurers should think wisely about how they attract them.

Watkins says: “If insurers pull consumers in with a discount or favourable rate they need to be aware that they may well lose them again the following year. Insurance providers need to think about how they can frame some sort of ongoing reward rather than just a reward for acquisition,” adds Watkins.


The GfK Financial Research Survey continually researches 60,000 consumers in the UK each year about financial services.

The study covers product holding, acquisition and behaviour, as well as the value of holdings across all banking, insurance and regulated products, in addition to demographic and attitudinal data. This research is based on the latest data available, going up until the end of August 2013.

Marketers’ response


Mark Vile
Marketing director
Compare The Market

Over the past five years, the number of people visiting Compare The Market has increased by more than 600 per cent. Our own research [with Millward Brown] finds that 80 per cent of people use price comparison sites as part of their process for sourcing insurance.

Consumers are much more tech savvy, which has happened in line with them being more time poor. Price comparison sites sit nicely in between those two trends and ultimately deliver what people are looking for in terms of better deals without it having to be a long, drawn out process.

Our advertising tries to reach as many people as possible. Once we have that relationship with the customer, we try to understand them better so they come back and use us for more products.


Nick Whitnell

Marketing manager


Price is one of the most important factors when deciding on a new insurer, but it isn’t enough on its own. We estimate that around 24 per cent of consumers will go for the cheapest price on a comparison site, which leaves three-quarters that also use their opinion of your brand [to make a decision].

The golden window of opportunity is always around renewal dates so we target them as much as possible. Our marketing campaigns are aimed at multiple stages of the research and purchase activity. However, by being consistent with our marketing we’re ensuring that we remain relevant to a broad audience and maintain a front of mind position. Our brand strength, heritage and marketing presence mean that LV= appeals to a broad spectrum of the identified typologies.



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