Insurance Price Issues

Some insurance companies have found that their websites have been offering out dated information. This means that quotes are being offered that shouldn’t be according to the Financial Services Authority. In other industries it is clear, fair and not misleading, but insurance has always been a problem. There have been about 17 price comparisons done on websites to see what the cost may be and what they are providing to the consumer. It was shown that 25 percent of all motor insurance sold was analysed in the study.

The Financial Services Authority is really concerned with the clarity of information. Many of us have found it hard to determine what is really being offered and if it is the right thing. The sites are providing what the FSA is calling “mixed evidence” meaning the fairness and accuracy of information is not there as it should be. The FSA looked at several issues listed below.

They looked at the levels that were excluded from the price or that were incorrect.

Warnings that the consumers need to consider the price as well as other policy information have been issued.

There are also a limited number of product issues to look at. Most look at price, but don’t look at the actual coverage and whether it is appropriate.

Quotes have also differed from what the consumer is being charged.

The FSA found that the 17 sites they looked at were adequately authorized as they should be even though there were some concerns on that as well. The FSA also wants to make sure that the sites are providing consistency to their consumers at the different levels. This means the information needs to be correct and updated more often than it has been in the past. This will help reduce assumptions and supply facts about the insurance.

There are several popular sites for comparison. Some consumers find they are cheaper for a range of deals. Some of the sites are even offering a commission to companies that recommend them. The insurance comparison sites usually see about 30 million quotes per year and especially in 2007.

The Centre for Competition Policy at the University of East has also looked into the issue of fairness and accuracy regarding these sites.

In 2006 and 2007 the FSA found that no action needed to be taken regarding the sites, but officers have been visiting them individually now to determine if this was the right move. We are trying to get more competition in the market for comparison to offer more accurate and fair data. There are many consumers who will look at the sites. It is important that any site who will be a comparison site will offer the entire policy instead of just price. After all if you compare insurance from two sites of the actual providers you will notice differences that are not just about cost. The FSA feels any comparison site needs to offer those differences in the coverage as well as the price to make it a fair assessment.

Back To Financial News May 2008

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