How competitive are price comparison sites for buying insurance?

How competitive are price comparison sites for buying insurance?

Dr. Gary Robertshaw

The first price comparison sites emerged in the UK towards the late 1990s when Internet usage was confined to a minority of the population and when on-line shopping for insurance was still largely a niche activity. Insurancewide and Money Supermarket sites launched in 1999, followed by Confused in 2002. These were later joined by a growing contingent of on-line price comparison sites such as Go Compare, Compare the Market, Beat That Quote, Quote Detective and Tesco Compare.

We recently did some research into how competitive price comparison sites were and came across some interesting findings. Using our own profile, car and driving history we obtained insurance premiums from four different price comparison sites; Go Compare, Moneysupermarket, Confused and Compare the Market. In addition, an insurance premium was obtained from Direct Line’s website given that this company does not appear on any price comparison sites.

In summary, we found the following:

Different insurers appeared on different price comparison sites.
The ranking achieved by a particular insurer varied across price comparison sites.
Different price comparison sites sometimes gave different premiums for the same insurer.
The lowest premiums were different on each price comparison site.
Premiums offered by price comparison sites were generally lower than if the consumer went to the insurer directly.
Direct Line’s quotation was higher than the insurers listed in the price comparison sites.

Bizarrely, in most cases, the lowest premiums could be obtained through the price comparison site for a particular insurer than if we went to that insurer directly!