 FSA says that Insurance Comparison sites are improving: The Financial Services Authority (FSA) has praised insurance comparison websites for improving their services and offering consumers information in an honest and straightforward way.
The findings followed a review of 17 leading insurance comparison websites earlier in the year by the financial services regulator. At that time, the FSA said a number of sites were ?جø¬? for whatever reason - providing inaccurate, out-of-date or misleading information.
Comparison sites - particularly those selling motor and home insurance - have seen rapid growth in the last few years. It is estimated that in 2007 almost a quarter of all private car insurance was sold via an aggregator site, generating over 30 million quotes.
The watchdog's original review took place in May and examined the workings of 17 leading comparison websites. It attempted to map the different stages of a customer's "journey", focussing on things such as providing personal information, obtaining quotes and finally, purchasing a policy.
The main issue raised was a lack of clarity. In some cases the information given to consumers was found to be out-of-date or wrong. In others the prices of policies were emphasised at the expense of their features.
Concern was also raised over the use of assumptions to generate quotes. Sometimes as a result, quotes were inaccurate and differed from the amount actually charged by the insurer or broker.
In its follow-up review the FSA consulted a sample of the firms that participated in the initial survey. It found that there had been a significant improvement, especially in terms of sites offering easy-to-understand, concise and accurate information.
The watchdog did however outline two key areas in which they thought there was room for further improvement. These were:
- Getting hold of clearer information about the excesses applying to insurance policies from insurers.
- Making it more obvious that quotes are often generated using assumptions about a customer's needs and circumstances.
While most firms showed the excess that applied to each quote they were sometimes unable to show the split between compulsory and optional excesses - often because the information had not been supplied by the provider.
The watchdog did not have a problem with the use of assumptions in principal but said it was important that their use was highlighted on the firms' websites, and not hidden in the small print.
On a positive note, the regulator praised the sites for:
- Offering accurate and up-to-date information
- Working hard to ensure that aggregator quotes matched those of 'direct' insurer quotes
- Demonstrating a lack of product bias, with provider rankings based on price and having nothing to do with commission levels
- Correctly disclosing information prior to purchase
- Using advertising that was (on the whole) fair, clear and accurate
Although the FSA has not released the names of the 17 sites that took part in the original review it is likely that they included well-known names such as gocompare.com, confused.com and moneysupermarket.com. All those involved are authorised by the Authority. †
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NCD News: FSA Changes Tune on Insurance Comparison Sites - 21.11.08
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