Calls to end price pacts between insurers and comparison sites
In a raft of proposals aimed at promoting competition in motor insurance, the Competition and Markets Authority (CMA) called for a ban on ‘price parity agreements’ between comparison websites and insurers which stop insurers from offering the same product cheaper elsewhere, including on competing sites.
Such agreements limit consumers’ access to more affordable products, according to the CMA.
“We believe price comparison websites are great in helping motorists look for the best deal, and this in turn has driven insurers to compete more intensely, but we want to see an end to the clauses which restrict an insurers ability to price its products differently, whether on different price comparison sites or on other channels,” said Alasdair Smith, chair of the private motor insurance investigation group and CMA deputy panel chair.
In addition, the CMA has called on the Financial Conduct Authority (FCA) to look at how insurers inform consumers on the costs and benefits of insurance-related add-ons.
“We find that there are particular problems in relation to no-claims bonus protection, where both the price of this product and its benefits are often unclear to consumers, and we believe insurers should provide much better information about it,” the CMA said.
Other measures include a cap on the charges passed to the insurer of an at-fault driver in an accident for the cost of providing a replacement vehicle to the non-fault driver and better information for consumers about their rights following an accident.
Smith said: “There are over 25 million privately registered cars in the UK and we think these changes will benefit motorists who are currently paying higher premiums as a result of the problems we’ve found.”