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Has the Reign of the Price Comparison Website Come to an End?

Has the Reign of the Price Comparison Website Come to an End?

In recent years we have changed the way in which we shop for car cover, relying on price comparison sites to do all the hard work for us. Although this can be very beneficial for those in need of coverage in a hurry it has proven to have a detrimental effect on the insurance industry as a whole. While insurers know the power of such aggregator sites can be beneficial in marketing their services it has no doubt had a huge bearing on the prices put forth to motorists. Research found that deals between insurers and such sites, commonly known as ‘price parity agreements’, were restricting independent insurers from offering competitive deals elsewhere. The Competition and Markets Authority claim that these deals are not only harming insurers but also encouraging higher premiums across the market, wanting to reduce these prices by banning such exclusive agreements. 'They certainly help motorists look for the best deal, but we want to see an end to clauses which restrict an insurer's ability to price its products differently on different online channels' said CMA deputy panel chairman Alasdair Smith. It has ordered the agreements to end, a move greeted by the Association of British Insurers (ABI). This change is likely to come into force in 2015 although we can expect an appeal from aggregator creators. The CMA also recommended that the UK's financial regulator, the Financial Conduct Authority (FCA), should inspect how insurers inform consumers about additional products on their insurance policies. 'The way motor insurance-related add-on products are sold makes it hard for consumers to obtain the best value' Mr Smith added. The CMA felt that no-claims bonus protection was principally problematic, with the price of this product and its benefits very vague. 'We are requiring insurers to provide much better information' it said. So, has the reign of the price comparison website come to an end? It certainly looks that way. Leave your thoughts below.

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