The competition and markets authority’s (cma) investigation is a waste of time
The Competition and Markets Authorityâs (CMA) investigation into pricing deals between insurers and price comparison websites was a waste of time, says Crispin Moger, CEO at Marmalade, provider of insurance and cars for young drivers.
âFollowing years of investigation, the CMA will now ban exclusive pricing deals between motor insurers and price comparison websites. It claims that such deals were preventing insurers from making their products available more cheaply elsewhere.
âIt is true that insurers offer the best available price to aggregators such as MoneySavingExpert, why wouldnât they? For a customer these websites are often the first point of call when searching for a good deal. However, these agreements certainly donât harm the consumer - if anything itâs more likely to be the other way round. My understanding is that some insurance companies actually lose money through partnerships with aggregators, but do so in order to grow market share and as part of a lifetime model marketing strategy.
âIt is really important that the customer feels they are paying a fair price for insurance and the internet gives them a simple means to find the best prices. It is therefore in the interests of an insurer to have consistent pricing across multiple sites, to do anything else would be confusing.
âDecisions of this nature are designed to protect the consumer, which should always be a priority - although in this case Iâm not convinced that it does have any benefits to the consumer. And actually it might be nice if some of these organisations started looking at how they can protect businesses from the small minority of customers that abuse their rights.
âThis is particularly true when looking at distant selling, where businesses are still susceptible to fraud from unscrupulous customers. From June this year the Consumer Contracts Regulations came into force, implementing the Consumer Rights Directive in UK law. This introduces measures including the right for customers to cancel at any point from the moment they place their order until seven days after they receive the goods.
âAnything that protects consumersâ rights is good, but what about the few that exploit the legislation â who protects the rights of a business? For some reason, insurance is seen by some as fair game and incidents of fraudulent claims as well as online applications are areas that need looking into. Undetected general insurance claims fraud total Â£2.1billion a year adding on average Â£50 to the annual costs individual policyholders face, on average, each year.
âWe need to work towards creating a better operational environment that not only protects our customers but the businesses offering products and services, which will enable us to continue offering fair and competitive pricing for the long termâ.