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FCA Price Comparison Websites Thematic Review Findings

The Financial Conduct Authority (FCA) has published the findings of its Thematic Review on Price Comparison Websites (PCWs).

The review focused on private motor, household and travel insurance and included 14 PCWs (representing 90% of the market). Consumer research to assess consumer expectations was also carried out to assess any gap between consumer expectations and what is being delivered by PCWs.

Consumer Research

The Consumer research commissioned by the FCA looked at consumers’ understanding of PCWs and their role, how consumers use them, and how PCWs might be improved. The researcg found that consumers often assume they are comparing products on a like-for-like basis and that all policies and add-ons are broadly the same in terms of the way they work or the level of cover they offer. Consumers often believe that higher quotes are simply over-priced rather than offering a better product/more benefits.

FCA Findings

  • The level of information provided was not always consistent with the relevant ICOBS rules. Not all PCWs had taken reasonable steps and provided sufficient and consistent information that went beyond price about core policy features (exclusions, excesses, additional fees), pre-existing conditions for travel insurance  and add-on products to ensure consumers achieve fair outcomes i.e. they are able to purchase products suitable for their individual needs. Information on add-ons was particularly confusing and often misleading.
  • Lack of clarity - PCWs had not always provided, or had failed to provide at the appropriate time, sufficient and prominent information about their role, where relevant, or any conflict of interest/affiliation with specific insurers.
  • Sufficient steps had been taken to ensure implementation of the FCA 2011 Guidance. However, in some instances procedures to ensure on-going compliance had not been put in place and as a result some PCWs had failed to fully implement the guidance.

Next Steps

PCWs, insurers and the regulator are expected to work collaboratively to improve consumer outcomes – however the onus is on PCWs to address the immediate concerns highlighted in the report - smarter and simpler disclosure and clearer information on their role - in the next six months.

The FCA will review the progress made by PCWs in January 2015. There are longer term issues that will need a joined-up approach across the sector around product/add-on descriptions and governance. This work will be closely linked to the add-ons market study report due to be published soon.


Last updated 01/07/2016