7th August 2022
Analysis of GlobalData’s 2021 UK Insurance Consumer Survey revealed that four price comparison websites—Compare the Market, GoCompare, MoneySuperMarket and Confused.com—dominate the UK’s motor insurance market, with 96.7% of UK consumers stating that they use these websites. The leading data and analytics company notes that it is extremely difficult for new comparison sites to get a foothold in the market, and this has led to promising startup Honcho closing its doors.
Reflecting on Honcho’s closure, GlobalData notes that the company’s business model, which paired customers with the most suitable motor insurance policy rather than comparing purely on price, was a likely reason for its failure. As UK consumers continue to battle with a cost-of-living crisis, price continues to be the most attractive element of a motor insurance policy for consumers.
Benjamin Hatton, Insurance Analyst at GlobalData, comments “The continued cost-of-living crisis in the UK has likely pushed even more consumers to look for better and cheaper deals on their car insurance, driving further business into the hands of the main players.”
Honcho’s offering was limited to private car, multi-car, and van insurance, leaving it struggling to compete with hundreds of products offered by the big four.
Hatton continues: “The lack of cross-selling opportunities also contributed to Honcho’s downfall, with 64.7% of respondents to GlobalData’s survey stating that they bought motor insurance through a price comparison site, having indicated that they did so as they had purchased another product through that site.”
GlobalData also notes that the four main price comparison websites’ bigger budget for advertising also adds pressure to smaller market entrants.
Hatton adds “Relentless advertising campaigns, combined with recognizable slogans, have made the four major price comparison websites difficult to challenge in terms of customer numbers. According to GlobalData’s 2021 UK Insurance Consumer Survey, 62.2% of all consumers that used a price comparison site did so because they had used it before, showing the power of familiarity.”
*GlobalData’s 2021 UK Insurance Consumer Survey (4,135 respondents)
GlobalData Trends(147 articles)
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