Table of Contents
Executive Summary
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- Impact of COVID-19 on price comparison sites
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- Figure 1: Short, medium and long-term impact of COVID-19 on price comparison sites, 2 September 2020
- The market
- Product research fell as lockdown reduced demand for switching…
- …and rising unemployment will threaten discretionary business
- Companies and brands
- Comparethemarket.com is the most popular comparison site…
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- Figure 2: Price comparison sites used to research financial services products in the last 12 months, July 2020
- …assisted by heavy spend on above-the-line advertising
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- Figure 3: Total above-the-line, online display and direct mail advertising expenditure by price comparison sites in financial services, 2015/16-2019/20
- Automated switching picks up pace
- The consumer
- Two thirds of consumers used a PCW in the last year
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- Figure 4: Financial services products researched using a price comparison site in the last 12 months, July 2020
- Three quarters of people researching car insurance go on to purchase
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- Figure 5: Products purchased after researching using a price comparison site in the last 12 months, July 2020
- Consumers want better coverage of T&Cs
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- Figure 6: Consumer attitudes towards transparency in price comparison sites, July 2020
- COVID-19 has provided opportunity to review existing products
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- Figure 7: The impact of COVID-19 on consumers’ approach to researching financial services products, July 2020
- PCWs are challenged by perceptions of cheaper direct sales
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- Figure 8: Consumer attitudes towards price comparison sites in financial services, July 2020
COVID-19 and Price Comparison Websites
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- Impact on the market
- Lockdown removed key prompts to research home and motor insurance
- Travel and credit demand was almost non-existent during lockdown
- Impact on consumers
- Financial pressures will boost demand for comparison…
- …and dampen interest in discretionary products
- Time to review existing products
- Impact on companies and brands
- Insurance terms and conditions are under the microscope
- Switching strategies to match changing consumer needs
Issues and Insights
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- COVID-19 has given time to assess finances, but removed sales points
- Consumers want greater transparency but no compromise on price
- Credit comparison is primed for innovation
The Market – Key Takeaways
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- Product research fell as lockdown reduced demand for switching…
- …and rising unemployment is a threat to discretionary business…
- …but price comparison will be highly valued during the recovery
Market Environment
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- Unemployment is projected to hit almost 12% at the end of 2020
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- Figure 9: Average annual unemployment rate, 2015-24 (forecast)
- Regulatory interventions slowed by COVID-19
- Lockdown reduced prompts to switch
- Consumers face prolonged travel confusion
Companies and Brands – Key Takeaways
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- Heavy spend on advertising leaves little room for challengers
- Automated switching picks up pace
- Aggregators as consumer advocates
- Promoting price comparison as a wellness product
Market Share
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- Comparethemarket.com leads a condensed market
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- Figure 10: Price comparison sites used to research financial services products in the last 12 months, July 2020
- Three of the big four increased revenue in 2019
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- Figure 11: Revenue of leading price comparison sites, 2018 and 2019
- Using only one site is the most common option
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- Figure 12: Number of price comparison sites used to research financial services products in the last 12 months, July 2020
Competitive Strategies
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- Automated switching picks up pace
- Gocompare.com proposes five-point plan to improve insurance renewals…
- …while Comparethemarket.com advocates tax cut for young drivers
- Renewable energy filter could be a sign of things to come
- Moneysupermarket.com turned to guidance during lockdown
- Confused.com Rewards offer choice of free gift
Advertising and Marketing Activity
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- PCWs spent £136 million on ATL advertising in the year to August 2020…
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- Figure 13: Total above-the-line, online display and direct mail advertising expenditure by price comparison sites in financial services, 2015/16-2019/20
- …split between marketing general insurance and comparison services
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- Figure 14: Total above-the-line, online display and direct mail advertising expenditure by price comparison sites in financial services, by product category, 2015/16-2019/20
- Comparethemarket.com remained by far the biggest advertiser
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- Figure 15: Total above-the-line, online display and direct mail advertising expenditure by price comparison sites in financial services, by advertiser, 2017/18-2019/20
- Nielsen Ad Intel coverage
The Consumer – Key Takeaways
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- Opportunities to expand credit comparison
- Consumers want better coverage of T&Cs
- COVID-19 has provided opportunity to increase engagement
- PCWs are challenged by perceptions of cheaper direct sales
Impact of COVID-19 on Consumer Behaviour
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- Financial wellbeing rose during lockdown…
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- Figure 16: The financial wellbeing index, January 2015-August 2020
- …but 27% are worse off since the COVID-19 outbreak began
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- Figure 17: Impact of COVID-19 on financial situation, 30 July-7 August 2020
- Confidence took a hit during lockdown but has improved since
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- Figure 18: Financial confidence index, January 2015-August 2020
- COVID-19 concerns are holding back the return of travel
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- Figure 19: How comfortable consumers feel doing travel activities, 3-11 September 2020
Product Research
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- PCWs are still primarily used to compare general insurance
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- Figure 20: Financial services products researched using a price comparison site in the last 12 months, July 2020
- Home ownership is a key driver of general insurance…
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- Figure 21: Insurance products researched using a price comparison site in the last 12 months, by living situation, July 2020
- …while credit comparison most appeals to parents of young children
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- Figure 22: Consumer credit products researched using a price comparison site in the last 12 months, by parental status, July 2020
- Most PCW users looked for one or two products in the last year
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- Figure 23: Number of financial services products researched using a price comparison site in the last 12 months, July 2020
Product Purchasing
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- Three quarters who researched car insurance went on to buy it
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- Figure 24: Products purchased after researching using a price comparison site in the last 12 months, July 2020
- Retail banking comparison is more often a scope of the market
Price Comparison Sites and Transparency
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- Strong demand for better comparison of T&Cs…
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- Figure 25: Consumer attitudes towards transparency in price comparison sites, July 2020
- …but aggregators are generally trusted
- Credit comparison offers the greatest scope for innovation
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- Figure 26: Agreement with selected attitudes towards transparency in price comparison sites, by type of financial services products researched using a price comparison site in the last 12 months, July 2020
The Impact of COVID-19 on Product Research
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- COVID-19 has provided opportunity to review existing products
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- Figure 27: The impact of COVID-19 on consumers’ approach to researching financial services products, July 2020
- Getting the best price is the priority…
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- Figure 28: Agreement with the statement “I am more interested in getting the lowest price” since the COVID-19 outbreak, by current financial situation, July 2020
- …ahead of concerns about product terms
Attitudes towards Price Comparison Sites
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- PCWs have achieved broad appeal across financial services…
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- Figure 29: Consumer attitudes towards price comparison sites in financial services, July 2020
- …but face strong competition from guidance websites
- Specialists face being squeezed out
- Consumers are split on the benefits of going direct to providers
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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