Is Price Comparison running out of road?

The general insurance industry in the UK has a dysfunctional distribution structure. In particular, the position of Price Comparison services in that structure adds cost to the system and places intense pressure on insurance companies to act against consumers’ interests.

There has to be a better way for consumers to buy insurance.

We ran a UK-wide research study early in October looking at the motor insurance market, to find out whether consumers are ready for change, and to explore what that better way might be.

The research headlines are that the majority of UK consumers are unhappy with the costs that Price Comparison introduce into the motor insurance distribution model and — perhaps more significantly — that they think that these services are making too much money.

This morning (31st October 2018), the FCA announced a market study to examine pricing in the General Insurance market. This announcement has gathered significant media coverage, mainly focussed on the ‘loyalty penalty’. The FCA’s initiative is very welcome, and will increase pressure for change in the market, both from a regulatory point of view and in fomenting consumer dissatisfaction.

Corke Wallis will be working with an insurance provider to take the findings of our research into development.

It seems clear that market conditions are ripe for change, so we can hope that UK consumers won’t have too long to wait before buying the right cover at the right price becomes the norm.

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Insurance Times coverage — 1st November 2018