March 24, 2017

Leading 70s fashion retailer BIBA is calling for a probe. Nothing unusual about that, you might think. Who among us, after all, has not at some time or other in their lives conceived an urgent desire to lay hands upon a probe of some kind. But why specifically at this particular moment in time is BIBA seeking a probe, you may still perfectly reasonably wish to understand. Aha! Bankstone News was just coming to that, if you could just be a little more patient.

BIBA wants the Comparison and Meerkats Authority (CMA) to use the probe in question to get to the bottom of what’s up with insurers and their comparison engines. According to the retro fashion house that time couldn’t kill, there’s something rotten in the state of comparison, and a nasty whiff of collusion and conflicting interests about the whole arena of comparement.

BIBA alleges that insurer-owned price comparison websites (PcWs) are rank with the filthy reek of conflict of interest (CoI) and should probably be banned or something, because they are so untransparent. It seems more than a little bit fishy, claims BIBA bloke Graeme Troutgills, that no sooner has one of its ‘broker members’ changed their rates on a PcW, than the insurer who owns that PcW mysteriously changes theirs too. If that’s not a thing that makes you go hmmm, Bankstone News would like to know what is! (Not really, we’re just being polite, but you know what we mean, presumably.)

BIBA thinks PcW users – or people who are merely PcW curious – should be warned about the sinister hidden agendas of the PcWs in question and the shadowy owners who lurk behind their beguiling cuddly anthropomorphic facades. Surely they have a point.

And BIBA aren’t the only ones. Some bloke called Jim Daley from Fairer Fiancé reckons the whole comparison site thing represents one big Ratnerization of insurance. It only looks like the insurance that people buy on PcWs is cheaper. Whereas in fact it’s actually more expensive, because insurance providers selling their wares on PcWs have to pay a flipping fortune for the privilege (160 quid according to BIBA’s GT) and can only afford to do it by stripping out cover and charging vast sums for admin and cancellation fees.

“We don’t need more price competition,” Jim reckons, “we need more competition on quality and service.” Somewhat unrealistically, he also thinks people ought to be able to understand what they are buying when they purchase insurance via a PcW. Clearly that’s never going to work! It’s not like insurance is an undifferentiated commodity like water, or gas, or casual sexual encounters with indiscriminate strangers. No, insurance is special. And quite complicated as well.

“Coverage, limits, exclusions, conditions, claims service and levels of assistance often differ between providers,” Troutgills explains. Price isn’t everything, he stresses, especially seeing as consumers often have no idea what they’ve bought for that special low low price until they get it home and try to make a claim against it. “This is the absolute worst time to find out they bought a poor policy,” the man from BIBA observes.

It’s all a bit of con, basically, Troutgills reckons, because PcWs, like the GTO (whose tariff structures  UK plc will shortly be espousing), insist on something called Most Favourite Nation status which is where a status or level of treatment accorded by one nation to another nation in international trade agreements and which means that the nation which is the recipient of this treatment must be granted the same advantages as the most favourite nation by the nation doing the granting of treatment.

That basically means that even though the sale costs them £160 less, insurance providers who use PcWs have charge direct customers the same vastly inflated sums demanded from purchasers of the same product via the PwC. In revealing this, BIBA Troutgills is potentially allowing some kind of consumer cat out of the bag. Insurance buyers who learn they’re paying over the odds just so that their insurance provider doesn’t miss out on some sales via a PcWarehouse, might potentially be pretty peeved and demand that, not only PWcs, but also their broker or other insurance provider of choice, be immediately abolished and then perhaps punished a bit retrospectively, just for good measure.

Who knows. One thing remains perfectly clear, it’s the horrible realisation that insurance price comparison is very far from being the safe and carefree playground of innocent bargain-bagging that everyone had hitherto blithely supposed it to be.

There’s another rough fistful of fondly cherished illusions crushed like so many butterflies in a blender.

Thanks a bunch, BIBA!


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