The Battle for Distribution Dominance

The UK general insurance industry is undergoing a period of accelerated change and both providers and intermediaries will have to rethink their role, warns Mario Aristides.

The shape of the UK Insurance market is changing at a rapid pace. The direct insurers and ‘affinity’ distributors such as retailers, banks and car manufacturers are taking an increasingly large share of the personal lines market. Over the past 15 years there’s been a seismic shift in how personal lines business is distributed. In 1990 insurance intermediaries controlled the vast majority of business being placed in the UK insurance market. By 2005 over 75% of personal lines business had shifted into the control of affinity distributors, large chains and the direct insurers. The birth of aggregators/comparison sites over the past three years has taken the personal lines market into another new direction in the distribution of insurance and may become the dominant force over the next five to 10 years. This growth of affinities, comparison sites and direct players has led to less advice and lower prices.

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