<<Back

BIBA Calls for Urgent Review of Price Comparison Websites

The Financial Services Authority regulations governing price comparison sites need to be reviewed according to the British Insurance Brokers’ Association (BIBA).

The call comes as a result of new research published by BIBA that looked into the effectiveness of the FSA's Insurance Conduct of Business rules in governing the behaviour of electronic introducers.

BIBA called the rules "not appropriate" as they were "finalised prior to before the development of price comparison websites".

BIBA interviewed 250 users that purchased cover through insurance comparison websites and found that:

• More than 50 per cent of customers did not "understand the differences between each insurance policy offered via comparison websites."
• Just over one in twenty website users said the details of what each policy covers is fully explained.
• 84 per cent of buyers said the policy details published on these websites were "confusing".
• 93 percent of visitors believed comparison sites were regulated in the same way as insurance intermediaries.

One major cause for concern highlighted by the research was one-third users did not realise that price comparison sites used a number of "assumptions" as the basis for providing online quotes, which potential could lead to visitors buyer unsuitable insurance cover.

Calling for a review of the rules, Eric Galbraith, Chief Executive of BIBA said that regulators must “ensure that consumers are being afforded suitable protections.”

He added: "Insurance products are complex, and it is important to understand the cover they provide. Brokers are professionally trained to help. Aggregators and technology are developing rapidly and consumers must be sold the right policy.

"BIBA will be discussing this with the FSA and I also welcome the opportunity to work with price comparison websites to find a suitable solution to this problem."