The Financial Services Authority is to launch an investigation into the fast-growing comparison site market, in response to renewed calls from the insurance industry for the FSA to begin regulating the sector.
The British Insurance Brokers' Association (Biba) yesterday became the latest group to raise questions about protection for consumers who use comparison sites, unveiling new research that found that more than half of the customers of insurance comparison sites do not fully understand the difference between the policies they are comparing.
Comparison sites such as Moneysupermarket.com and Uswitch.com have exploded in popularity over the past few years, and are now believed to account for more than 50 per cent of motor insurance policy sales, as well as a growing proportion of home policies. Consumers are also increasingly using the sites to shop for loans, credit cards, savings accounts and home utility providers.
"There are still too many people logging on, and making a decision solely based on the price of a policy, rather than the protections it offers them – and potentially buying an inappropriate policy," said Biba's chief executive, Eric Galbraith. "Insurance products are complex, and it is important to understand the cover they provide. Brokers are professionally trained to help."
A spokesman for the FSA said that although the regulator had considered comparison sites before, it would now re-examine the issue in light of the latest information to decide whether it should intervene in the market.
Moneysupermarket.com res-ponded to the news, describing Biba's call as "the death rattle of a dying sector". "Consumers know that if you go to a broker you'll get a quote that covers a few broker-based insurers but excludes highly competitive direct insurers like Swiftcover," said Richard Mason of Moneysupermarket.com.Reuse content