24th Sep 2014 07:52
LONDON (Alliance News) - The UK Competition and Markets Authority on Wednesday said it has finalised measures it expects to result in increased competition in the car insurance market and reduced premium costs for drivers.
In a statement, the UK competition and consumer authority said the measures include a ban on agreements between price comparison websites and insurers which stop insurers from making their products available more cheaply on other online platforms.
Other measures are aimed at providing better information for consumers on the costs and benefits of no-claims bonus protection.
In addition, the CMA recommended that the Financial Conduct Authority should look into how insurers inform consumers about other products sold as add-ons to car insurance policies.
"There need to be improvements to the way price comparison websites operate. They certainly help motorists look for the best deal, and this in turn has led insurers to compete more intensely, but we want to see an end to clauses which restrict an insurer's ability to price its products differently on different online channels. We expect this to lead to greater competition between price comparison websites," Alasdair Smith, chairman of the private motor insurance investigation group and CMA deputy panel chairman, said in a statement.
"The way motor-insurance-related add-on products are sold makes it hard for customers to obtain the best value. There are particular problems in relation to no-claims-bonus protection, where both the price of this product and its benefits are often unclear to consumers, and we are requiring insurers to provide much better information. We would also like the FCA, as part of its ongoing work on insurance add-ons, to consider how drivers could be better informed in making their choices," Smith added.
However, the CMA said it was unable to find an effective way of resolving the problem with the cost of post-accident services to drivers who are not at fault in an accident, in particular temporary replacement cars.
"Reluctantly we have had to conclude that we cannot see an effective way of addressing this problem fully short of a fundamental change in the law and, whilst this problem does increase premiums for motorists, the extent of the problem is not as high as was at first envisaged and does not warrant such a radical measure. However, we do wish to challenge the benchmarks typically used in awards for non-fault replacement cars, which do not reflect the cost of the services provided and which we think should be lower," Smith said.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
AdmiralAvivaDirect LineAA..LEsure Group