ComparetheMarket home insurance deals could deny people better prices
The CMA has provisionally found that clauses in many of ComparetheMarket’s contracts with home insurers break competition law and could lead to higher premiums
The Competition and Markets Authority (CMA) has investigated clauses used by the comparison site in its contracts which stop home insurers from quoting lower prices on rival sites and other channels.
After reviewing the evidence, the CMA has provisionally found that these so-called “most favoured nation” clauses could be causing customers to miss out on better home insurance deals.
This is because the clauses prevent rival comparison sites and other channels from trying to win home insurance customers by offering cheaper prices than ComparetheMarket. It also means home insurance companies are more likely to pay higher commission rates to comparison sites with the extra costs potentially being passed on to customers.
As a result, people buying home insurance could be missing out on cheaper premiums.
Today, the CMA has issued ComparetheMarket a “statement of objections”, which sets out its provisional view that the contracts break competition law. The company will now have an opportunity to respond in detail and the CMA will consider the response and any further evidence before reaching a final decision.
CMA Chief Executive, Andrea Coscelli, said:
Over 20 million UK households have home insurance and more than 60% of new policies are found on price comparison sites. Therefore, it’s crucial that these companies are able to offer customers their best possible deals.
Our investigation has provisionally found that ComparetheMarket has broken the law by preventing home insurers from offering lower prices elsewhere. This could result in people paying higher premiums than they need to.
This current investigation continues the CMA’s work in the sector following a market study into digital comparison tools. The study, which concluded in September 2017, showed that many people visit more than one comparison site as they shop around for the best deals. It also laid out clear guidelines for price comparison sites on how to use people’s personal data and how to display important information such as price and product description.