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In recent years there has been rapid growth in the number of comparison websites for general insurance and consumer use, including for products like automobiles and home insurance. Industry figures suggest that nearly 25 percent of all private motor insurance sold in 2007 began in this way.
But fierce competition is the primary buyers of Internet sales tactics inappropriate? A review of the comparison websites Price was launched by the Financial Services Authority (FSA) after a survey commissioned by the British insurance Brokers Association (BIBA) showed the ability of serious injury to consumers. In particular, respondents said that about 84 percent of insurance buyers that the details of insurance policies offered through price comparison websites can be confusing.
The review of the FSA took a snapshot of the current market to determine whether the comparison sites insurance are behaving in a way that treats customers fairly, and in particular whether the information provided to consumers is clear, truthful and not misleading. The results revealed several deficiencies:
Use of warnings and calls for: sites compared with the warnings and precautions, not always provide consumers with sufficient information to act on them. In one case, tells the applicant that some assumptions have been used to generate the supply of insurance, but there is a chance to review.
Too bad – a key Price: Rightly or wrongly, the price is often the key factor purchase and therefore the level of tolerance is essential to judge whether a quoted premium is competitive. Price comparison sites should provide information on this is "clear, truthful and not misleading." However, the excess cases were found was given as a whole ", while excluding the compulsory excess. In other cases, the information provided about the level of excess was substantially incorrect.
Basis of comparison: Creating the ability to compare products is at the heart of what insurance comparison sites should be trying to achieve, but they are doing with different levels of success. Sites that compare a limited number of product characteristics, and in particular, when the price is the only factor considered, consumers should receive clear and timely warning when deciding which procurement policy that:
- Other features should also taken into account.
- The products listed will have different features (not all of which are listed), which may vary enormously.
Only a small number of companies provide this information. When it was provided, tended to be incorporated into the fine print.
Accuracy of Information: Businesses should have systems to ensure that the information they provide to consumers is consistent, accurate and kept up to date. A number of price comparison sites provided incorrect or out of date information, or provide the same level of information for each of these policies. This created the false impression that the characteristics of certain policies were not covered by the policy. Cases were also detected when the quotation given by the comparison site differed from the amount actually charged by the broker or insurer.
Systems and controls to verify the consistency of information: Companies should have systems and checks to determine if the information is correctly transmitted to the broker or insurer. In one case, this information is not being done correctly.
Commenting on the results, a spokesman for the Association of British Insurance Brokers said he was pleased the FSA is calling for comparison sites price to provide more information to consumers, but must go further: "As brokers, comparison sites should guarantee their quotes." He noted that the FSA has stressed the importance of counseling in the purchase of insurance and suggested that: "Calling a broker is the easiest way for consumers get this advice, ensuring they receive the right coverage at the right price.
Clearly the FSA review revealed some worrying deficiencies. brokers have traditionally carry out comparisons of their customers, who use their experience and market knowledge to achieve a balanced recommendation that takes into account price, policy coverage, the insurer of the levels of service and other customer needs. The message seems to be websites compared with due caution and if in doubt, use regulated insurance agent instead.
About the Author:
Philip Green has over 35 years experience in the insurance and financial services industry. He is a Chartered Insurance Practitioner and graduate of the Open University. Philip works part-time as a freelance journalist, writing about current financial topics.
Article Source: ArticlesBase.com – Insurance Brokers or Comparison Websites? Who is Treating Customers Fairly?
