There’s a pervasive logic among insurers when it comes to insurance tech. No one wants to be first, but everyone wants to be second. This makes a certain kind of sense. Being the first to adopt new tech carries risk, but of course, no one wants to be left behind.
There’s a huge amount of uncertainty in the consumer insurance marketplace. This has been triggered by changes in regulations (such as the FCA’s General Insurance Pricing Practices) and the Covid pandemic, but is being sustained because it’s still unclear how the insurance market is going to shift. This has been compounded by a more general uncertainty. The world is feeling increasingly chaotic and there’s an underlying sense of “anything could happen”.
The one thing that is certain is that, in the UK, this drama is being played out on the Price Comparison Websites (PCWs). If you’re an insurer, broker or MGA dealing in consumer insurance, this is the frontline of your battle to be competitive and not see your quotes being buried at the bottom of the results page.
The trepidation in the marketplace is almost tangible, but the challenges on the aggregators predate even the COVID-19 pandemic.
Pricing competition
In the same way that not being on the front page of Google can be seen as the equivalent of not existing online, returning a quote on a PCW, or aggregator, that isn’t close to being the cheapest is to be virtually ignored.
But competition on the aggregators is actually more intense than the search engine battles. Being in the top three on Google will still net some decent traffic, but being anywhere but the top of an aggregator’s results, unless you’re a household name, could lose you a significant amount of clicks.
Brand cut through and stacking
Incredibly, we’re now at a point where even being the lowest quote may not be enough. If you push a monster brand into second place but only by a negligible amount, consumers will often still go with the name they know.
Cutting through against the biggest players is a constant battle. But even the large brands have their competitive challenges (usually against each other), evidenced by the trend for insurers to list multiple times for the same quote, either through different products or through subsidiaries.
This creates the phenomenon of brand stacking where a returned page of quotes may see multiple results all belonging to the same insurer. A lesser-known brand may be able to achieve some success by increasing the number of “ticks” across the range of inclusions. But ultimately, it’s going to come down to whether you can out-price the market.
Click to purchase (CTP) ratio
Winning the clicks is, of course, only the first part of the battle. The next step is to convert the prospect. On the aggregators, this is especially important because a low CTP ratio may still see you being charged for the click. The effect is to drive down your overall profits, hindering your ability to stay competitive on price.
I think that’s enough of the doom and gloom. Let’s get to the part where we solve all of these challenges with one piece of software that handily connects – via API – to your existing tech.
Nuon AI levels the playing field
The largest insurers have advantages such as economies of scale and larger teams of underwriters. But if they’re not using Nuon AI, and you are, you can outflank them on price by acting faster (much faster) to changes in the market. You can also run thousands of live tests to improve your conversion rate, increasing your overall profitability.
Nuon offers two products that are perfectly matched for competing on UK PCWs: Nuon Adjust and Nuon Bid.
Let’s look at each of these in turn…
Nuon Adjust reacts quickly to market changes
Nuon Adjust runs live experiments (within parameters set by you and your underwriters), testing small price adjustments with the aim of increasing or restoring profitability.
For example, if a competitor drops their price and your conversion dips, Nuon Adjust will seek to restore your position by adjusting prices to match or beat the new quotes. On the flip side, if your product is exceeding expected conversions, Nuon Adjust will experiment with increased pricing with the goal of increasing profits while still maintaining conversions.
Crucially, because Nuon Adjust runs these experiments on small subsets of your quotes, before rolling a successful result across your whole book, the experiments can be carried out at incredible speeds while still allowing you to proceed with due caution.
To see exactly how this works and explore simulated data, download our new white paper, An Insurer’s Guide: How to Win on Insurance Aggregator Platforms with AI-Powered Real-Time Market Pricing Technology
Nuon Bid withholds quotes to maximise CTP ratios
If Nuon Adjust is about being competitive on the aggregators, Nuon Bid is about going after specific profit targets and even specific customer profiles.
Nuon Bid, just like Nuon Adjust, runs experiments on subsets of your quotes. But in this instance, the goal is to increase your conversions by withholding quotes that have a low probability of turning into a sale. Again, you and your underwriters maintain control by setting parameters for the CTP ratio. And that control even extends to targeting specific customer profiles.
For example, you can set Nuon Bid the target of withholding quotes that have a CTP of below 25%, UNLESS the quote is for a consumer that has a specific datapoint – such as a desired location – you wish to target.
Nuon Bid, in essence, offers the perfect balance between improving the profitability of your aggregator activity, while still keeping your hands firmly on the levers of what’s possible.
Nuon Adjust and Nuon Bid are the perfect pairing
When the average consumer goes to GoCompare or Compare The Market, they likely have no idea of the ferocity of the battle taking place in the algorithms. But you do. And that’s why I believe that you don’t need me to tell you the extent of what you could achieve if you add Nuon Adjust and Nuon Bid to your aggregator activity.
And remember – this ISN’T a replacement for your existing tech. This is an API that attaches to your existing software and opens up a whole new world of possibilities for competing with even the biggest of insurance brands.
For example, we recently ran a simulation for a UK motor insurer who had lost market share. By putting Nuon AI to work, the insurer was able to recover their market share in just 36 hours and fully adjusted to the competitor’s price change in 3.5 days.
To see more on this case study, download our free white paper, An Insurer’s Guide: How to Win on Insurance Aggregator Platforms with AI-Powered Real-Time Market Pricing Technology.
This ability to monitor market conditions and react in real time, and in an automated way to recover your take-up rate is unique to Nuon AI.
That last line was too important to just breeze past so I’m going to be indulgent and say it again, with a little formatting flourish.
This ability to monitor market conditions and react to recover your take-up rate is unique to Nuon AI.
Nuon lets you be first AND second to market
If you love the idea of Nuon AI but are still nervous about, potentially, being one of the first in a particular vertical to embrace new technologies, there’s a way to be cautious and bold all at the same time.
How? By running a simulation based on your REAL aggregator activity. Nuon Adjust and Nuon Bid will get to work, running experiments in a digital sandbox, and then report on what the results would have been if the simulation had been real.
Think of it as a mirror version of your business being the first to market. Once you’ve seen the results and you’ve proven the concept to your own satisfaction, we can move you onto a LIVE version in as little as four weeks.
Staying competitive on the aggregators starts here…
The volatility in the market, and consequently the aggregators, isn’t going to go away any time soon. To stay competitive and enjoy enhanced performance – while other insurers are struggling simply to hold their ground – you need a technological advancement that doesn’t rely on deep pockets or historical brand name recognition.
Nuon AI IS that competitive advantage.
To get started, book a free discovery call with our partners, and we’ll answer every one of the questions that are, no doubt, rattling through your head right now.
The call is free, there’s no obligation, and we’ll show you exactly how effective Nuon AI can be when added to your aggregator strategy.
