Should consumers be made more aware of how comparison sites earn their commission?
The Competition and Markets Authority (CMA) says it will look at whether consumers should be made more aware of how comparison sites earn their commission. The study will consider sites across industries, including suppliers for broadband, energy, insurance and banking.
Crispin Moger, CEO at Marmalade, believes that we should be ensuring that we support potentially more vulnerable customers such as young drivers in their first foray in the insurance market.
“A new driver’s first experience in purchasing car insurance can be a daunting prospect and I believe that we should be supporting these customers as much as possible through this journey, and also through their first few years driving, to help them to grow in confidence and ability. To do this, it’s important that customers have access to as much information as possible, to enable them to make an informed choice.
“Whilst it’s widely accepted that aggregators (comparison sites) are commonplace in the insurance market these days and as a result, many customers will use these websites to search for the cheapest products, we need to make sure that customers are aware that not all products are offered through aggregators, and also that there is much more to a product than just price.
“The introduction of aggregators has led to more customers shopping around each year, and this means that customer loyalty is not what it used to be. In the past, it was not uncommon for a customer to stay with an insurer for a number of years, however nowadays, customers are more likely to switch insurers on a yearly basis. The competitive prices on an aggregator make retaining a customer more of a challenge, and it is with this in mind that I feel that we need to be offering a product that supports the customer throughout the year, so that at renewal, the customer wants to continue their driving journey with their insurer, rather than looking at alternative options.
“In our experience, the majority of young customers prefer to speak to us by phone to discuss the product, showing that even with comprehensive information on a website, customers still appreciate further guidance. Due to the nature of the number of products displayed on an aggregator, the information that can be displayed is limited, and as such this may mean that young customers find the process of selecting a product confusing.
“We’ve demonstrated that it’s possible to run a profitable business whilst delivering a service which cares about a customer’s pocket as well as their physical well-being. This is at the core of Marmalade’s customer ethic and for me this approach is what our industry should be all about.”