A survey commissioned by Insurance Revolution has found that 55% of UK consumers believe you get the best deal on insurance by going direct to the provider.
Yet despite this, more than half of motor insurance purchases each year go through comparison websites.
Recently, the Competition and Markets Authority (CMA) has announced that exclusive pricing deals between providers and comparison sites are to be banned. It ruled that such agreements stifle competition in the marketplace and therefore ultimately mean higher premiums for consumers.
Insurance Revolution Head Operating Officer, Mark Rigby, welcomes the changes. He comments:
“We have many customers coming to us who are faced with the plight of seeking competitive quotes based on a specific set of personal needs. While 55% of the people we surveyed believe going direct does represent the best deal, that still means a huge 45% think it will work out better for them to go to comparison sites. We deal with people with a very specific set of circumstances. Specialising in convicted driver insurance means we’re dealing with those most likely to struggle to find competitive premiums and it’s my belief that the one-stop-shop style comparison website isn’t the right place for a premium tailored to some very specific needs. So it’s my hope that these changes will mean over time even more consumers see the benefit of dealing direct with providers set up specifically to meet specialist circumstances.”
The same survey of 750 UK consumers found that 15% believe they have a poor knowledge of how personal circumstances affect premiums, something Mark Rigby believes is the responsibility of the insurance industry to rectify. He adds:
“All too often, providers just give consumers a quote based on a set of questions with very little explanation as to the factors that influence that quote. I believe that, as providers, we should be transparent and ensure consumers understand what influences their insurance costs.”
Perhaps the most surprising finding of the survey was that 44% of consumers rate cashback offers or High Street Vouchers as the number 1 priority when choosing a motor insurance policy, while just 9% rate cost as the number 1 priority and a lowly 6% rate a policy tailored to their needs as top priority.
Mark believes this is again down to a failing of some providers to be transparent. He states:
“Offering consumers High Street Vouchers or Cashback is a marketing gimmick and of course providers will use incentives to attract customers. But if almost half of consumers rate that as more important than a properly tailored policy, then, as an industry, we have some work to do. If a policy isn’t tailored the individual it covers, there could be real problems when it comes to that consumer trying to make a claim against that policy later on. And as an industry, it’s our job to educate consumers – not just sell to them.”