The UK’s Financial Services Authority is assessing the insurance comparison web site market, after it “found evidence of both good and bad practice.” In fact the FSA said it would be “looking for all web sites to ensure that users are treated fairly.”
In a review of 17 insurance comparison websites, the FSA found that, although they are all appropriately authorized, there was mixed evidence in terms of the clarity, fairness and accuracy of the information given to customers. The review looked at:
— Whether consumers were encouraged to consider features, other than price, before purchasing products;
— Clarity of the levels of excess that apply to insurance policies; and
— Whether firms have appropriate systems and controls in place for ensuring that key product features included within insurers’ policies are correctly listed on their site and that they correctly relay consumer information to brokers and insurers.
The regulator has provided examples of good and bad practice to help firms meet the standards it expects.”
Stephen Haddrill, the Director General of the Association of British Insurers (ABI), commented: “Comparison websites help customers get a good deal. The best are those that provide clear, accurate and up-to-date information about the policy cover as well as price. The FSA is right to focus on ensuring that more sites are of this quality. We support their guidance and plans for regular visits to firms. We also believe the FSA’s review should be extended to cover all financial services comparison websites.”
The FSA reviewed these websites in 2006 and 2007, but at that time it “concluded that no immediate action, other than to follow the development of the market, was required.” The present assessment follows the “continued growth of the market both in terms of the number of websites and the volume of consumers using them,” said the FSA.
Ed Harley, The FSA’s head of financial promotions, noted: “We welcome innovation and competition in the rapidly expanding insurance comparison website market. However, we are keen that the market develops in a way that ensures customers are treated fairly, and expect comparison sites to provide information that is clear, fair and not misleading.
“We recognize that many consumers use these websites to search for insurance products. Consumers should shop around for the best deal, but it is important that they compare what’s covered by a policy, and not just focus on the price.”
Sources: Financial Services Authority – www.fsa.gov.uk and The Association of British Insurers – www.abi.org.uk
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