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What did the investigation find?

The Competition and Markets Authority (CMA) says that clauses in contracts have broken competition law. Between December 2015 and December 2017 ComparetheMarket restricted competition between its rivals and this is likely to have resulted in customers paying higher insurance premiums.

Just sit back and think about that for a moment. A website has become so powerful that it can control an insurance market, featuring household names.

The CMA first condemned ComparetheMarket in November 2018 for breaching competition law. The CMA’s executive director for enforcement, Michael Grenfell, said: “Price comparison websites are excellent for consumers. They promote competition between providers, offer choice for customers and make it easier for consumers to find the best bargain.

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“It is therefore unacceptable that ComparetheMarket, which has been the largest price comparison site for home insurance for several years, used clauses in its contracts that restricted home insurers from offering bigger discounts on competing websites – so limiting the bargain potentially available to customers.

“Digital markets can yield great benefits for competition, and therefore for consumers. We are determined to secure those benefits and ensure that competition is not illegitimately restricted.”

What does this investigation highlight?

But does this not highlight a bigger issue that comparing and buying insurance products based on price and the model of PCWs is flawed? These comparison sites, who appear to be at the top of their game, mostly earn their bucks through commissions and sponsored listings. The cheap insurers are promoted to consumers at the top, despite it not necessarily being the right product but price remains King if such popular websites continue to promote products in this way.

Whether it’s home insurance, life insurance or pet insurance, we’ve all become conditioned to believe that choosing the cheapest provider on the market is the best way to shop – in part, it’s human nature but only accentuated by PCWs. But purchasing insurance this way means that you’re totally overlooking the most fundamental aspects. Buying the wrong insurance or financial product, especially, can be devastating so we must promote such products in a different way, judging them on different parameters. Really, we should be asking; are you going to get exceptional service? Is your claim likely to be paid out? Does the policy offer a comprehensive level of cover? If these questions aren’t at the forefront of your mind, you could be purchasing a policy that isn’t even worth the paper it’s written on.

If nothing else, Covid-19 has proven that many of us had purchased inadequate, price-based, travel insurance policies!

All of the well-known comparison sites are geared towards price and making us think this way. Is it not time to change? Is £17.9m not a wake up call for the industry, before someone gets really hurt!?


How are we challenging the broken Price Comparison Website model?

Compare by Review believes that the PCW model is broken and doesn’t give consumers much of a chance to choose the right product providers. There is a gap in the market for a comparison site that genuinely works for the consumer and helps them compare policies based on the level of service and product quality that insurers offer, as opposed to putting a focus on the price of policies. It is our belief that price is important but shouldn’t be the deciding factor, we’ve built a mechanism that allows consumers to take back control and sows a different seed when choosing an insurance provider.

Mark Gordon, CEO of Compare by Review said: “We work on behalf of the customer to highlight insurance providers that excel at what they do and we don’t allow our comparison tables to be influenced by the providers pricing or ability to pay us commissions.”

Our comparison tables put a spotlight on providers that have been reviewed highly by real customers. We champion the consumer and believe that honest reviews are the best way to deliver a reliable view of companies, in order to help customers buy with confidence.

We encourage our users to purchase the best policy on the market from a provider that they can rely on when they need them most and we certainly don’t think people should be purchasing a policy for the mere fact that it comes with a cuddly toy.