FCA launches price comparison sites thematic review
The FCA has launched a thematic review into price comparison sites selling general insurance products. The review will involve 14 websites, representing 90% of the market, and a number of insurance providers. The review will look at whether websites’ focus on price means consumers are failing to get the best deal for their needs.
As part of its review the FCA will look at how key information is presented by price comparison sites and whether that might lead to consumers not fully understanding the service they are getting; whether there is too much of a focus on headline price; and whether consumers may be misled into purchasing products or add-ons which do not meet their needs.
The FCA also plans to check for conflicts of interest, such as whether a recommended insurer owns a comparison site, look at the possible inappropriate use of customer data, and question firms about revenue generation to look at whether the customer or profit is really at the heart of a business model. The FCA says it wants to ensure the growth in popularity of comparison sites has not come at the expense of transparency and fairness.
A key concern is the ‘expectation gap’ – where people believe they are getting a good deal because they are saving money initially, only to find they are not covered as comprehensively as they thought when they make a claim. The FCA says the review will focus on motor, travel and home insurance because these are the most popular insurance products bought through comparison sites.
In addition to speaking with comparison sites and insurers, the regulator will also engage with trade bodies, other regulators and consumer groups. The FCA will publish its results, and what action it expects price comparison sites and insurers to take, next year.