Concerns raised over insurance comparison websites
Watchdog calls for firms to improve standard of information given to consumers
Published:
THE City watchdog has called on insurance comparison websites to improve some of the information they give to consumers shopping around for quotes.
The Financial Services Authority (FSA) said a review of the sites showed that many had made significant improvements and were consistently providing clear and fair information.
But it said some firms needed to go further to address concerns it had about the information provided on the level of excesses on policies and the assumptions made when generating a quote.
The regulator said the websites generally showed the level of the excess but were often unable to show the split between the compulsory and voluntary excess, often because they did not have this information from the insurers themselves.
It added that where comparison sites made assumptions about people to generate quotes, they did not always set this out clearly, with it often buried in the small print instead of being more prominent.
The FSA visited 17 comparison websites, which collectively represented 50% of all sales, following an initial review that had been carried out earlier in the year.
This review uncovered a number of problems, including that the sites could be misleading consumers because of the way they presented information.
The number of comparison websites available and the number of consumers using them has seen significant growth in recent years.
Last year, one in four of all private motor insurance policies was taken out through one of the sites, which generated 30million quotes during the year.
Dan Waters, the FSA’s director of retail policy and conduct risk, said: “We are pleased that firms have made improvements in the information they provide. But it is imperative that all comparison websites provide clear information so that consumers can make informed decisions. We have contacted all websites involved in our review, to set out our findings and the standards we expect.”
The FSA also reviewed advertising by the firms and found that the vast majority of adverts were clear, fair and not misleading. The British Insurance Brokers’ Association (BIBA) welcomed the review and called for the industry to take prompt action to provide consumers with clear information on excesses and assumptions.
It said if this did not happen, the FSA should outlaw assumptions and force aggregators to provide clear information about the total excess.
Steve White, BIBA’s head of compliance and training, said: “We will be watching closely to see that price comparison websites address the FSA’s concerns, and if not, will be calling for a number of their practices to be outlawed.”
