The number of price comparison websites is set to shrink to five within two years, according to business advisory firm Deloitte.

Price comparison sites, known as aggregators, are more likely to struggle if they specialise in motor insurance.

The motor insurance market generated its 14th consecutive underwriting loss last year and although price comparison sites are an established part of the industry, Deloitte is predicting an 'aggregator crunch'.

Matt Perkins, partner and head of financial services for Deloitte in the Midlands, said: "Within two years it is likely that there will only be five major players in the motor insurance arena unless a new aggregator enters with a significant marketing budget or a highly innovative offering.

"At present there are a small number of aggregators that dominate the market and barriers to entry, such as demanding advertising spend, leave smaller players unable to compete unless they are focussed on specific niches.

"Aggregators have aggressively increased their advertising spend. The 'Big 5' aggregators, Go Compare, Confused.com, Moneysupermarket, Tesco Compare and Compare the Market, increased their combined TV advertising spend by 90 per cent in 2008 to £80m. This represented nearly 2.5 per cent of total TV advertising in 2008, which is a significant amount.

"Having a well known and respected brand is vital for insurers to enjoy success on aggregators."

Research conducted by YouGov for Deloitte in May found that 66 per cent of consumers are unlikely to purchase insurance online from an unknown brand.

Further more, last year 38 per cent of new motor insurance business came via aggregators.

"Aggregators have been successful as they offer price transparency to consumers at a time when price is a major criterion for people buying on the internet," said Mr Perkins.

"The larger aggregators have developed strong brands through innovative advertising campaigns, such as the infamous Compare the Market meerkat mascot.

"But insurers face challenges regarding their strategies to increase their sales volume and profitability, and with so many comparison sites, customer retention is becoming increasingly difficult.

"They could 'go it alone' without aggregators and directly compete with them, although only businesses with strong brands and significant market share could attempt this.

"To survive, insurers in today's market must have a clear aggregator strategy whilst relentlessly reducing costs, continuing to innovate as well as develop strategies to improve retention."