The Competition and Markets Authority’s (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.
“Following 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.
“It is true that insurers offer the best available price to aggregators such as MoneySavingExpert, why wouldn’t they? For a customer these websites are often the first point of call when searching for a good deal. However, these agreements certainly don’t harm the consumer - if anything it’s 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.
“It 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.
“Decisions of this nature are designed to protect the consumer, which should always be a priority - although in this case I’m 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.
“This 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.
“Anything that protects consumers’ rights is good, but what about the few that exploit the legislation – 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 £2.1billion a year adding on average £50 to the annual costs individual policyholders face, on average, each year.
“We 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 term”.
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Marmalade is a trading style of Young Marmalade Limited (registered in England under company number 04627884) and Provisional Marmalade Limited (Registered in England under company number 06779950).
Registered office for both companies is Marmalade House, Alpha Business Centre, Mallard Road, Bretton, Peterborough, PE3 8AF. Young Marmalade Limited is an Appointed Representative of Provisional Marmalade Limited, which is authorised and regulated by the Financial Conduct Authority under Firm Reference Number 542063. You can check this on the Financial Services Register by visiting www.fsa.gov.uk/register/.