Changes for car insurance finalised
The Competition and Markets Authority (CMA) has published new measures aimed at increasing competition in the UK car insurance market and reducing the cost of premiums.
Having surveyed the market the CMA found that some price parity clauses in contracts between price comparison websites and motor insurers prohibit insurers from making their products available more cheaply on other online platforms, with the effect of restricting competition. The measures include:
- a ban on agreements between price comparison websites and insurers which stop insurers from making their products available more cheaply on other online platforms
- better information for consumers on the costs and benefits of no-claims bonus protection
- a recommendation that the Financial Conduct Authority looks at how insurers inform consumers about other products sold as add-ons to car insurance policies
Alasdair Smith, chairman of the private motor insurance investigation group and CMA deputy panel chairman, said: “There need to be improvements to the way price comparison websites operate. They certainly help motorists look for the best deal, and this in turn has led insurers to compete more intensely, but we want to see an end to clauses which restrict an insurer’s ability to price its products differently on different online channels. We expect this to lead to greater competition between price comparison websites.”