Last month we published one interview on the BPO division of Gruppo MutuiOnline (MOL), the Italian owner-operated company that has compounded FCF at over 40% for nearly 20 years. This week we published two more interviews on the company from different angles: one interview on the price comparison business unit and the other with a MOL customer of both broking and BPO. We believe the two interviews this week highlight MOL’s growth opportunity and deep moat.

In 2020, 75% of MOL's operating income came from the Broking division which owns a collection of price comparison businesses for mortgages, consumer loans, and insurance products. We interviewed the Former COO of, the PE-owned multi-product price comparison site, to understand how the company competes with MOL’s and sites.

Price comparison is a simple lead generation business: buy large TV ads to drive online traffic and generate the cheapest leads for suppliers. Comparison sites are effectively outsourced marketing units for suppliers with huge network effects that lead to winner-takes-most dynamics and 50%+ EBITDA margins. These are unique assets mainly that are worth exploring.

As a quick side note, we are curious why price comparison sites are usually found outside the US? Maybe it’s because the likes of GEICO and Progressive (price comparison mainly started in the more commoditised motor insurance) already had large market share and relatively high percentage of direct traffic that a standalone site didn’t make sense?

In Italy, only ~13% of motor insurance policies are sourced through price comparison compared to over 65% in the UK. This is mainly due to an older, less-digitally savvy Italian population which prefers the traditional, physical branch channel to provide comfort when purchasing complex financial products. Another barrier to higher penetration is that policies are less profitable for insurers online relative to the branch network. The average Italian motor policy has decreased from over 330 EUR to 220 EUR in the last 10 years as over 70% of new policies are sold online. An aging Italian population, stronger labour unions, and less profitable policies online have led to online penetration to only grow from 3% to 13% in 10 years.

Another insight was the difference in motor insurance and mortgage price comparison. Car insurance seems to be the perfect product to generate leads online for a few reasons:

  • Car insurance is mandatory and renewed annually
  • Average policy value is 200-300 EUR
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