We love strong opinions here at IE magazine, because without new thinking and a challenge to the existing status quo, there can’t be genuine progress across the world of insurance. So here’s some thoughts on the Meerkats fine by the CMA, from Compare By Review. If you feel the urge, add a comment below, just keep it libel/hate free 😉
With a particular comparison website in hot water this week (they’re represented by a sassy meerkat…), the issue surrounding unfair and unscrupulous insurance comparison tables has risen its ugly head.
The said leading comparison website has been issued with a £17.9 million fine from The Competition and Markets Authority (CMA), for preventing home insurance providers from offering cheaper prices on rival comparison sites between December 2015 and December 2017. By restricting competition between its rivals, its likely to have resulted in customers paying higher insurance premiums.
Just sit back and think about that for a moment. A website has become so powerful that it can control an insurance market, featuring household names.
This revelation comes as a huge blow to the company that positions itself as a consumer champion and claims to be “committed to offering [its] customers the best service possible.” However, we must remember, this isn’t the first time they’ve been in hot water with the CMA after being condemned in November 2018 for breaching competition law.
But does this not highlight a bigger issue that comparing and buying insurance products based on price and the model of price comparison sites are flawed? These sites, who appear to be at the top of their game, mostly earn their bucks through commissions and sponsored listings. The cheap insurers are promoted to consumers at the top, despite it not necessarily being the right product but price remains king if such popular websites continue to promote products in this way.
Whether it’s home insurance, life insurance or pet insurance, we’ve all become conditioned to believe that choosing the cheapest provider on the market is the best way to shop – in part, it’s human nature but only accentuated by price comparison websites. But purchasing insurance this way means that you’re totally overlooking the most fundamental aspects. Buying the wrong insurance or financial product, especially, can be devastating so we must promote such products in a different way, judging them on different parameters. Really, we should be asking; are you going to get exceptional service? Is your claim likely to be paid out? Does the policy offer a comprehensive level of cover? If these questions aren’t at the forefront of your mind, you could be purchasing a policy that isn’t even worth the paper it’s written on.
If nothing else, Covid-19 has proven that many of us had purchased inadequate, price-based, travel insurance policies!
All the well-known comparison sites are geared towards price and making us think this way. Is it not time to change? Is £17.9m not a wakeup call for the industry, before someone gets really hurt!?
Compare by Review believe that the price comparison website model is broken and doesn’t give consumers much of a chance to choose the right product providers. There is a gap in the market for a comparison site that genuinely works for the consumer and helps them compare policies based on the level of service and product quality that insurers offer, as opposed to putting a focus on the price of policies. It is our belief that price is important but shouldn’t be the deciding factor, we’ve built a mechanism that allows consumers to take back control and sows a different seed when choosing an insurance provider.
Mark Gordon, CEO of Compare by Review said: “We work on behalf of the customer to highlight insurance providers that excel at what they do and we don’t allow our comparison tables to be influenced by the providers pricing or ability to pay us commissions.”
He also added “Our comparison tables put a spotlight on providers that have been reviewed highly by real customers. We champion the consumer and believe that honest reviews are the best way to deliver a reliable view of companies, in order to help consumers buy with confidence.”
Compare by Review encourage their users to purchase the best policy on the market from a provider that they can rely on when they need them most and they certainly don’t think people should be purchasing a policy for the mere fact that it comes with a cuddly toy.