UK watchdog, the Competition and Markets Authority (CMA), announced Tuesday it was opening an investigation into an un-named insurance price comparison website.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
Following a 12-month review of the online insurance price comparison sector, or, digital comparison tools, the CMA has uncovered concerns that one company’s behaviour is pushing insurance prices up for consumers.
The watchdog is looking into the prospect that one business is operating on a ‘most favoured nation’ clause. This means the insurer would promise to give that comparison site its best price, lower than available elsewhere.
This could have the effect of pushing the overall price of insurance with that group up, for consumers using other price comparison sites.
The CMA is beginning a six-month probe into the unnamed business. At the end of which time it will either conclude no wrong-doing, or name the site and take action.
Despite the news that one site is potentially in breach of competition rules, the CMA’s report found that digital comparison sites were generally supportive in helping consumers to find cheaper insurance deals and to save time while doing so.
“We have found a mostly positive picture of people’s use of and attitudes to DCTs, and the ways DCTs treat people; but also concerns, especially on DCTs’ transparency, accessibility and clarity about their use of personal information,” the summary of the CMA’s final report stated.
The watchdog detailed the areas in which improvements could be made. The main points were all related to insurance price comparison sites treating their customers more fairly, by being:
- Easy to use
Three of the UK's most well-known insurance price comparison sites are, Moneysupermarket, Compare the Market and Go Compare. Moneysupermarket is listed on the London Stock Exchange and was trading 2 points, or 0.64% lower around midday Tuesday.
Compare the Market is in the process of getting its house in order, ahead of its stock market float later in 2017.
As of 12:04 BST, Tuesday, 26 September, Moneysupermarket.com Group share price is 288.85p.