Assetsure News 15th September 2007

Compare the Comparison Sites

There has been much talk this week about Tesco launching it's new motor insurance comparison website, enabling people to research insurance markets other than just Tescos alone. These new comparison web sites are seen as the latest manifestation of online insurance brokers. Traditionally people went to an insurance broker who did the shopping around for them. Normally he would have access to about 30 or 40 insurers rates and would offer the best deal he could find after asking the customer information about their demands and needs.

The comparison web sites perform a similar roll, except that the customer inputs the details themselves and the site will trawl various insurers’ rates and present the results in a logical sequence. The advantage for the consumer is that the comparison website will have access to rates unobtainable to an insurance broker (from direct insurance writers). However an insurance broker may have access to rates that these comparison sites do not. Frequently an established insurance broker with a good book of business will be given” special” discounts by an insurance company enabling good quality business to be picked up at the right price.

The rise of the direct insurance companies in the 1980s is one of the reasons why so many compare sites are now appearing on the scene. Television advertising is saturated with adverts from companies offering the cheapest car insurance, anyone that has taken the trouble or managed to stay awake long enough to telephone a number of these companies soon realises that often the results differ greatly. Consumers of tired of the sad, you can save £150.00 off your insurance catch line and the development of the internet has enabled thousand of people to do their own research in a matter of minutes.

So cutting out the middleman doesn’t always seem to save you money, for at least the last 30 years the only effective way to obtain cheaper insurance was to research the market, to seek quotes from as many companies as possible and this is what your friendly high street broker always did. Many of these businesses have now gone but in their place, new companies offering a kind of comparison are springing up.

There are at least 10 major comparison websites, but unlike you high street homeowner insurance broker, they may not be as independent as you think and certainly don’t assume that they will research the whole of the market for you, no one can promise that and no one offers that service. Tesco are backed by RBS Group, Confused.com is owned by Admiral. Gocompare.com is backed by Esure and Comparethemarket.com is owned by the Budget group.
Tesco will; compare only 25% of the insurance market for you and this includes companies already in the RBS group.

Ultimately though, every comparison website will rise and fall on the strength of it's products, in all probability consumers will simply use a number of comparison websites to help them make their insurance choice.