Regulator to assess transparency and fairness
The FCA has launched a thematic review into insurance price comparison websites (PCWs).
The review will include 14 PCWs, representing 90% of the market, and several insurance providers.
It aims to ensure that their rapid growth in popularity has not come at the expense of transparency and fairness.
As part of the review the FCA will question firms about revenue generation, check for conflicts of interest, such as where a recommended insurer also happens to own the PCW and look at the possible inappropriate use of consumers’ data, or people being directed towards unauthorised insurers, among other measures.
FCA director of supervision Clive Adamson said: “We’ve all used a price comparison website so we know how simple they make buying motor, travel or home insurance. We don’t want to lose that convenience, but we do need to ask the question, ‘does cheapest equal best?’
“We want to get to a place where consumers who use these sites buy with the confidence knowing that they have all the relevant facts.”
Almost half of all internet users have used PCWs to research motor insurance, with four out of five going on to purchase insurance through this channel.
A quarter of all internet users have bought home insurance through a PCW.
The thematic review will focus on motor, travel and home insurance.
The FCA will publish its results, and what action it expects PCWs and insurers to take, next year.