The Rising Importance of Aggregators in Insurance

by Juan Mazzini,  Luis Chipana, November 26, 2014
Industry Trends
Latin America

Abstract

Distribution in insurance has gotten more sophisticated over the years. On top of traditional players, a great number of nontraditional channels have appeared. The Internet has enabled new players, spurred new business models, and become an important distribution channel.

A few years ago aggregators entered the picture, some as new players and others as offspring or extensions of brokers and producers. In Latin America aggregators are operating in 90% of the countries (18 out of 20).

Celent sees aggregators as an interesting phenomenon that could change business models in cases where low value is perceived, though competing with other channels such as banks and retailers with similar online capabilities.

The report The Rising Importance of Aggregators in Insurance discusses aggregators operating in Latin America, their importance, background, availability, breadth of offering, processes, and lines of businesses.

Aggregators as we know them today are an incipient way of competing with producers, retailers, and banks, although some of these may establish an aggregator site as part of their digital strategy. They look nice because they are born digital, but they seem simple, just a comparison site, and therefore they do not fulfill a trusted advisor role.

“The presence of aggregators forces insurers to rethink many aspects of their strategy,” says Luis Chipana, an analyst with Celent’s Insurance practice and coauthor of the report. “Insurers need to consider how this channel fits their overall strategic positioning and value proposition.”

“The arrival of aggregators brings transparency to the market and gives customers a simple way to shop around,” adds Juan Mazzini, a senior analyst with Celent’s Insurance practice and coauthor of the report. “Other channels, or even insurers reaching directly to customers, need to figure out where and how they will add value; otherwise they will lose to low-cost, simple, transparent sale outlets such as aggregators.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

2

 

Methodology

4

 

Limitations

5

A New Force in the Market

6

Aggregators in Latin America

8

 

The Process Behind Aggregators

8

 

Penetration of Aggregators in the Region

9

 

Major Players

10

 

Insurers and Products

11

 

A Partner or a Threat

14

Conclusion

16

Leveraging Celent’s Expertise

18

 

Support for Financial Institutions

18

 

Support for Vendors

18

Related Celent Research

19

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