Why do insurance companies offer lower renewal premiums via price comparison sites rather than directly?
I received by post a notice of renewal with a £350 premium from my insurer following my second year of cover. This was a £100 hike over the previous year. As usual, I surfed for competitive quotes and lo and behold found no offer of cover from this insurer via Go Compare but a much lower offer of £240 from them via Moneysupermarket. I decided not to accept the posted notice of renewal and instead to take up their confirmed quotation via the internet. During the online process came the likely need to send proof of No Claims. Expecting this to trigger a way out for the insurer to decline (sending them their own proof of NCD), I was somewhat amused to receive a near instant email acceptance of my full premium payment which included a statement that they had automatically been able to obtain the NCD proof. A few days later I received the certificate and policy documentation. I wonder how many get taken for a ride in this way.
Asked on 2 April 2011 by DB, Chesterfield
Answered by
Honest John
What most people don't understand is that many price comparison sites and indeed some direct insurers are really no more than brokers owned by private equity firms. The tactic by these is always to inflate a premium or annual subscription and try to get away with it, only allowing a lower premium if the policyholder declines and starts to shop around from one price comparison/broker site to another.
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