Mony Group growth dampened as cheaper car insurance premiums curb switching activity

Mony Group, formerly known as Moneysupermarketcom, has reported sluggish revenue growth as falling car insurance premiums lead to a downturn in consumer switching. Over the first half of the year, the FTSE 250 price comparison specialist saw annual revenue growth slow to just 1 percent, totalling £225 million, compared to 5 percent this time last year.

The core insurance division, once buoyed by surging premiums, posted a 2 percent slide in revenue to £118 million. Car insurance premiums have decreased by 9 percent year on year, prompting motorists to stay with their existing providers rather than shopping around for more competitive deals. Responding to this trend, Mony Group has pivoted its focus towards other insurance categories, including home, life and travel. Notably, home insurance premiums across the market have bucked the trend and climbed by 4 percent.

Following the pandemic, elevated claims costs spurred insurers to hike premiums, prompting consumers to actively seek savings and fuelling the price comparison sector. With the recent moderation in motor premiums, the incentive to switch providers has waned, directly impacting user activity on the platform.

Despite these challenges, Mony Group is moving forward with a £30 million share buyback initiative as part of broader plans to return £96 million to shareholders over the course of the year. The company has held its interim dividend steady at 3.3p per share. However, shares slipped 6.7 percent to 205p in afternoon trading.

Chief Executive Peter Duffy, who took the helm at the outset of the pandemic, is driving a shift away from reliance on third party pay per click advertising. The company is developing a “member based” model designed to offer more incentives to users engaging with its suite of services. Mony Group anticipates adjusted profits for the year of £143.7 million, in line with market expectations.

Mony Group, which began life nearly thirty years ago as a mortgage listings operation, now provides a one stop shop for consumers comparing deals on loans, credit cards, broadband and pet insurance. The business also owns the renowned MoneySavingExpertcom, established by Martin Lewis.

The rebrand from Moneysupermarketcom to Mony last year was intended to better reflect the company’s evolution beyond its original price comparison roots. Active user numbers across Moneysupermarketcom and cashback site Quidco fell by 1.3 million to 13 million, a change attributed to declining switching rates for car insurance and energy. Nonetheless, revenue per active user increased to £19.83, driven by a greater uptake of multi product purchases and higher value insurance categories.