Price Comparison Websites (PCWs) are increasingly popular among consumers and are a key distribution channel for retail general insurance products, especially private motor insurance.
In its recently published thematic review the FCA found some PCWs are failing to meet consumers’ expectations and, in some cases, FCA regulatory standards.
The FCA considers that PCWs do not always adequately ensure that consumers are given appropriate and clear information necessary to help them to make informed decisions. This increases the risk that consumers focus primarily on headline price and brand without understanding key policy features (such as exclusions or excess levels).
While some PCWs do provide appropriate information, the FCA found that the level of clarity varies significantly across providers.
Clive Adamson, FCA director of supervision, said:
“We expect price comparison websites to take on board the findings of the review. It is also important for consumers to understand that not all products are the same and the cheapest product may not always be the best for their needs.”
The thematic review also identified that:
PCWs do not always make clear the nature of the service they provide and their role in the distribution chain. In some cases consumers mistakenly believed the PCW had provided them with quotes based their individual needs; Some PCWs belonging to an insurer of broker corporate group fail to disclose this conflict of interest, which is against FCA rules (though the FCA found no evidence that firms used this relationship to their commercial advantage); Some PCWs have failed to implement guidance published in 2011.
The FCA has given individual feedback to the PCWs directly involved in the review and the FCA expects all firms to consider the FCA’s findings and to take appropriate action.
A full copy of the FCA’s findings can be found here: http://www.fca.org.uk/your-fca/documents/thematic-reviews/tr14-11