Online price comparisons sites: How technology has destabilised and transformed the UK insurance market

Abstract

Rapid growth in consumer use of the Internet, coupled with advances in e-commerce technology, has created a platform for online price comparison sites to thrive, leading swiftly to their dominance as a route for transacting insurance in the United Kingdom. This paradigm shift has created an environment of radical change, fostering consumer empowerment and insurer instability while forcing a reappraisal of strategic direction for the UK insurance industry. This article discusses the emergence of price comparison sites as a precursor to the rapid change now occurring in the UK insurance sector, and examines the implications of these sites for both consumers and companies. Drawing on case study figures and using a hypothetical model, the longer-term implications for company profitability and that of the wider industry are considered. This paradigm shift away from a relatively stable, slow-changing market sector to one undergoing tumultuous transition serves as an example of the manner in which e-commerce technology is likely to play an increasingly pivotal role in precipitating change and expediting market transformations at a global level.