The Competition and Markets Authority (CMA) have today fined Compare the Market £17.9m for keeping home insurance prices artificially high.
In an investigation spanning 3 years, the CMA found - as published in their findings today - that Compare the Market (CTM) breached competition law by imposing restrictive terms on home insurers selling through their platform. These clauses, say the CMA, prevented insurers from offering lower prices via other PCWs, and protected CTM from being undercut elsewhere.
As a result, the CMA says, CTM’s clauses are likely to have have led to higher insurance premiums for consumers.
We have made no secret (see, for example, here and here) of how dimly we view some of the practices of some outdated price comparison sites, and this is yet another example - which CTM disupte - of PCWs treating consumers with contempt in pursuit of their own gains.
It is time for consumers to stop being convinced that cute, friendly cuddly toys and the like are the hallmark of a great place to buy insurance, and that “cheap at all costs” is the right and only thing to consider when buying insurance.
For far too long insurance buyers have been led to believe that PCWs are free to use and are the best way to buy, but as our research in 2019 showed, this simply is not the case. Few know that they are paying hefty commissions when using a PCW and surely there can be few consumers who, on reading today’s CMA findings, would be impressed with some of the tactics being employed.
At Honcho we believe there is a better way for consumers to buy insurance, and one that is free of any smoke and mirrors, underhand tactics or gimmicks. Our reverse auction marketplace allows car and van drivers to specify exactly what they’re looking for from their insurance, and then providers bid against each other - in real time - to offer that coverage at their best price. There is no commission at all, and how we make our money is always totally transparent.
We believe that helping customers to buy the right insurance and getting that at a great price, whilst at the same time helping providers to work hard to win the business that is right for them, is a significant leap forwards for everyone involved in the buying and selling of insurance.
We are all for fair competition within the insurance market, but using a dominant position to restrict competition and thus distort the market is simply wrong.