CMA probes aggregator on links with insurers
The Competition and markets authority has opened an investigation into a price comparison site and its contracts with insurers.
The regulator said they may have led to higher premiums on home insurance products. It did not name the aggregator involved or the specific nature of its concern.
”It is opening a competition law investigation into how one site has set up its contracts with insurers, because it suspects this may result in higher home insurance prices,” the regulator announced.
”We are also taking enforcement action where we suspect the law may have been broken,” said CMA chief executive Andrea Coscelli.
The CMA also announced what it described as “clear ground rules” for all online comparison tools, following a year-long study of the aggregator market.
The ABI welcomed the new ground rules, and said its submission to the CMA had included a call to tighten the rules on price comparison websites restricting prices that insurers can offer elsewhere.
“We would like to see the rules tightened on price comparison websites using contracts which restrict the prices insurers can offer to customers elsewhere – known as Most Favoured Nation clauses. It is good to see the CMA investigating this issue further and we welcome their new ground rules which should improve consistency of standards,” said James Bridge, head of conduct regulation at the ABI.
The CMA ground rules cover issues such as communicating how aggregators plan to use people’s personal data and clearly displaying important information like price and product description.
”Our study has found that most people in the UK have used a comparison site at least once so it is vital that everyone gets the benefits they deserve. The good news is that more than 90% of the people we surveyed were very or fairly satisfied with the sites they used,” Coscelli said.
”But we have also found that improvements are needed to help people get even better deals. We have set out ground rules for how sites should behave, as well as being clear on how regulators can ensure people have a better experience online.”
The main recommendations from CMA’s final report include:
- All sites should be Clear, Accurate, Responsible and Easy to use (CARE).
- All sites should be clear about how they make money; how many deals they’re displaying and how they are ordering the results.
- Sites should be clear on how they protect personal information and how people can control its use.
- It should be made as easy as possible for people to make effective comparisons or use different sites, for example through better information about products.
- All regulators with a stake in this area should work together to ensure people are well protected.
The report also reveals that nearly two-thirds of people using a price comparison site visited more than one when shopping around.
The CMA said it will now continue to work with the sector, regulators, and other bodies to ensure its recommendations are understood and taken on board.