U.K. regulators banned car insurers from making agreements with price comparison websites, saying it limits competition and increases premiums.
The agreements stop insurers from making their products available more cheaply on other online platforms, the Competition and Markets Authority said in a statement today. The CMA also recommended that the Financial Conduct Authority further investigate how ancillary insurance products are sold.
“There needs to be improvements to the way price comparison websites operate,” said Alasdair Smith, chairman of the private motor-insurance investigation group and the CMA’s deputy panel chairman. The websites have “led insurers to compete more intensely, but we want to see an end to clauses which restrict an insurer’s ability to price its products differently on different online channels.”
The FCA said in March said it would “shake up” the £1 billion ($1.6 billion) general insurance add-on market to increase competition. In its report today, the regulator found that insurers provide limited information on the sale of additional motor insurance products, such as no-claims bonus protection, which make it difficult for consumers to compare costs and benefits.
Shares of Admiral Group Plc and Esure Group Plc fell in December after the U.K.’s Competition Commission said it’s seeking to reduce policy costs for Britain’s £11 billion motor-insurance industry. Admiral owns the confused.com price comparison website, and Esure owns a 50 percent stake in Gocompare.com
Was this article valuable?
Here are more articles you may enjoy.