Price comparison sites in the insurance sector is increasing throughout Europe
The number of price comparison sites in the insurance sector is increasing throughout Europe, but not yet in the Nordic countries. According to a report from EIOPA there is only one comparison site each in the Nordic countries. Thirteen European countries have more then 10 price comparison sites.
What are the reasons why some countries have multiple price comparison sites for life insurance
In an increasing number of countries there are more than twenty price comparison sites in the insurance sector. Is Sweden heading in the right direction? In the UK, the ban on commission payments for brokers has led to them recommending customers to price comparison sites instead. And not just that - to sites where they receive remuneration for referring customers. Sometimes it is even the brokers who are behind the price comparison site. This is perhaps not a completely improbable scenario even in Sweden. Several sites are not increasing transparency and are in any case not better for consumers.
In the personal risk sector a health declaration must be completed to obtain the final premium. In this case the price comparison should be based on premiums after the risk assessment, not before, which is customary today. There are still no price comparison sites that offer this. It would be an interesting service in addition to payments for the viewing of products that the broker or price comparison sites can provide the insurance company chosen by the customer. Itello has examined the company's costs for the risk assessment process and there is a lot of money to be saved by automating it.
In a report by EIOPA earlier in the year they investigated the significance of price comparison sites in Europe with the aim of surveying the actors on how the sites look today and what is considered and should be good practice.
An interesting thing is the wide variation in the number of sites in the countries.
Six countries had more than 20 price comparison sites
Holland, France, Romania, Spain, UK and Czechoslovakia
Eight countries had between 10 and 15 price comparison sites
Greece, Ireland, Lithuania, Poland, Slovakia, Germany and Hungary
Twelve countries had between 1 and 10 price comparison sites
Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, Croatia, Lathvia Malta, Norway, Portugal and Sweden
They also looked at who was behind the site and in several cases where it was.
EIOPA considers it good practice for a comparison website to:
- Present information about the main features and characteristic of products, insurance cover and limitations (e.g. deductibles, limits, exemptions, etc) as well as the length of the validity of the quote.
- Present information in a manner that is uniform and appropriate for the complexity of products.
- Communicate in a clear and simple language, avoiding jargon and unnecessary technical terms as much as possible.
Provide Internet uses with the final premium and details of all the fees and charges.
- If this is not possible, comparison websites should clearly state what additional charges and/or fees are to be paid by the consumer (for instance, application fees).
- Clearly disclose information on what is covered for each product offered
After responses were obtained from different actors some additional suggestions emerged on what should be considered available on price comparison sites
- Information about the website
- Market coverage
- Dealing with potential conflicts of interest
- Criteria used to make the ranking
- Presentation of information
- Frequency of updating information