Price comparison websites have come under the spotlight again
Consumers are increasingly purchasing inappropriate insurance policies through Price Comparison Websites (PCWs) due to fixation on headline prices over ‘crucial product features such as policy coverage and terms’, according to a FCA review.
In a recent thematic review of the industry, Clive Adamson, the FCA’s director of supervision, stated:
“We’ve all used a price comparison website so we know how simple they make buying motor, travel or home insurance. We don’t want to lose that convenience, but we do need to ask the question, ‘does cheapest equal best?’”
With around a third of motor insurance policies being brokered in this fashion, it should be a priority for consumers to be clearly presented with all the critical information before taking out a policy, something the FCA says some PCWs are failing to ensure.
Unlike the price comparison sites under scrutiny, the Quotall quote, buy and manage system takes a ‘what-you-see-is-what-you-get’ approach. PCWs tend to generate quotes based on a number of assumptions which could mean significant price differences when it comes to purchase. The Quotall system provides transparent, instantly bindable quotes with full policy details, meaning no surprises when it comes to purchase. In addition, whereas PCWs will pass on their users to the insurer/broker’s website after the quote process takes place to repeat a quote process, the Quotall system provides quote, buy and manage facilities all on the same platform.
Impartial and Transparent?
Quotall is completely independent of any insurance company or provider, but the FCA has warned that some PCWs which are owned by large insurance groups are failing to disclose the potential conflict of interest between providing impartial information and profit protection. While there is no evidence to suggest that in any of these cases the relationships are being exploited for commercial gain, it is still something a discerning consumer may wish to bear in mind when looking for the best deal. Martin Wheatley, the chief executive of the FCA, has previously expressed his reservations about PCWs. In his statement to parliament in 2013 he called for greater disclosure and behavioural alterations in the market.
Ongoing FCA activity
FCA investigations into this industry continues, with particular attention being paid to the private motor insurance industry and suspected backdoor deals between PCWs and insurance providers. The FCA have stated that after their investigations have concluded, they will offer individual recommendations to offending PCWs requesting they take action on aspects of their business which fail to meet their requirements.