“It’s a double-edged sword,” then Consumer Intelligence insights manager Mike Miskelly told Insurance Business earlier this year. “If it’s done well, it can provide clear choices, or, if it’s done badly, it can just be confusing.”
More than 50% of insurance purchasers using aggregators over the last year saw three or more brands from the same insurer in the top five results, according to data from Consumer Intelligence, which collects data on thousands of quotes generated monthly. This is up from around 20% in 2017, meaning there has been an increase of 30% over the past five years.
The practice, according to Consumer Intelligence, was first developed by two motor market players and has “existed as long as the PCW”.
However, the customer acquisition tactic has since been adopted by a “greater range” of providers and Consumer Intelligence is increasingly seeing it in the home insurance market too.
“It’s far more common in motor than home, but that’s kind of on the change a little bit,” said Miskelly.
Insurance Business understands there have been market murmurings that the Financial Conduct Authority (FCA) may wish to look into the practice down the line, with firms that may be pushing products that are not sufficiently differentiated potentially facing up to tough questions.
It is “highly likely” that the FCA has been monitoring behaviour around brand stacking, according to Miskelly, particularly following General Insurance Pricing Practices and product governance rule changes.
Last October’s product governance changes, though, rather than GIPP as some pockets of the market had feared, are more likely to be responsible for a boom, according to Miskelly.
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“A lot of what we see was driven not by the pricing rules, but by the product governance rules,” he said.
“As we moved into 2022, January being the ‘Big Bang’ for GIPP rules, we’d already started to see this uplift in brand stacking, and it goes hand in hand with the number of products that the providers have.
“We started seeing more and more tiered product offerings launched, differentiated brand offerings launched, and in some cases, like the resurrection of, say, a legacy brand that was on PCWs but wasn’t very active become more active.”
While Consumer Intelligence’s analysis suggests that initial fears that GIPP changes could lead to an onslaught of dodgy brand stacking tactics may well have been unfounded, there have been at least a couple of instances that could suggest insurers or brokers may have looked to flex the rules to get ahead.
“We’ve only seen one or two cynical cases of that, where it looks like a legacy brand has clearly been resurrected and repositioned as the cheapest brand line PCW ahead of another sort of bunch of brands from the same provider to kind of get around those GIPP rules,” Miskelly said.
“The most obvious one that we saw was very temporary, it was only for a couple of weeks.”
With PCWs keen to remain compliant and offer customers a good experience, Miskelly suggested they could to some extent be “self-regulating” to keep bad behaviour off their websites.
In the past, some stacked brands have effectively offered the same cover but under a different brand name, though this appears less common into 2022.
“[GIPP and product governance rules have] triggered a lot of insurers to look at that and review that situation and say, well, actually, if we’re going to the trouble of having two brands on PCW, you might as well differentiate them,” Miskelly said.
“We’ve seen quite a few of those sister brands, or legacy brands, be repurposed in something that is truly different from the headline brand.”
PCWs may look to ensure that customers are kept informed about the differences – or lack thereof – between products and brands.
Consumer Intelligence believes they could be on the “cusp of change” to make search results “more value oriented than price oriented”.
“If you look at the sheer volume of products on the PCWs now, it would make sense to move in that direction,” Miskelly said.
As for the FCA’s take on brand stacking, a spokesperson said: “We expect firms to comply with our rules to design and distribute products that offer fair value to customers.
“We routinely engage with firms on their approaches to this, and we will take decisive action where we uncover evidence that companies have not acted in the best interests of their customers.”
