What price “direct insurance” without comparison sites?

My best case scenario is to see the direct insurance tv ads and the BT Broadband tv ad every evening. Both get me into a weight reducing “lather” or if you like “leaping about” with rage.

Dealing with direct insurance. What price direct insurance if “we” were unable to compare the quotes we get from them on comparison sites like moneysupermarket? From my experience I have never had a quote from a direct insurance company which I have not been able comfortably to beat with CS quotes which include brokers.

I do feel that with appropriate regulation by the FSA and Advertising Standards Authority these ads should have a “wealth warning”.

Access

The reason some 'direct insurance' companies withdrew from comparison sites was that they could not compete on price with other companies. I think the withdrawal reason they gave was that the comparison sites did not provide an adequate comparison on the policy cover, so consumers were not making informed choices. I think there is some merit in this argument, as I believe that people are buying the cheapest policies, without checking the policy cover. Some of the cheapest policy providers that offer 'budget type' insurance, should be reviewed by consumers carefully before they proceed. This should include google searches looking for reviews and forum comments.

Huckster

"Withdrawal reason" (no I'm not just replying so I can use a fnarr, fnarr :-)) - you jogged my memory and quite understandable and we agree on the big picture that the consumer should have a meams of comparison which you put as:

"Some of the cheapest policy providers that offer 'budget type' insurance, should be reviewed by consumers carefully before they proceed. This should include google searches looking for reviews and forum comments."

My back up comment is it should work both ways ie "direct" under the microscope too.

access:

you jogged my memory and quite understandable and we agree on the big picture that the consumer should have a meams of comparison which you put as:

My back up comment is it should work both ways ie "direct" under the microscope too.

I think the FSA or another body (ABI ?) should implement a rating system of some variety to identify the quality of cover i.e. the benefits the policies offer and another rating to signify the quality of customer service. If hotels and restaurants can be given ratings and subject to inspections, I think Insurers/Brokers should be aswell. There is the Defacto site which I have just remembered and perhaps this could be enhanced. http://www.defaqto.com/star-ratings.

Under Defacto Direct Line Car Insurance is a 4 star product which apparently is for people who want a policy with above average levels of a wide range of quality cover. My own policy with the AA which was very competitive is only a 3 star product and is for people who want a policy with average levels of a standard range of cover. I am happy with this as the AA policy was approx £100 cheaper than the DL policy.

Atleast with the internet people can make informed choices if they are willing to spend time, reviewing the policy cover and Insurers service reviews. All the information is available, it is justa shame it is not all available in the same place.

Huckster

Yup, absolutely! You know one of my pet hates is "pat on the back" websites ie unaudited testimonials. Whether or not they are true or made up it is impossible to say but even if they're all true strangely no negative ones are published. At least if only positive and % of total plus audited would be step in right direction. Frankly I think you have to go a long way to beat the ebay principle on feedback where the seller has very little control now they can't threaten negative feedback. Amazon ok and I think Google checkout ok.

Interesting point ; just got a renewal quote from our existing provider for car insurance, rather surprisingly it seemed very competitive, having only increased by ~ 4% from last year when we had been "new" customers.

Did a quick check on comparison sites and couldn't get very near their quote. Then I tried Direct Line as a "new" customer , I was shocked to be quoted ~ 40% more for the same cover. They used to be very competitive, clearly not so now despite their misleading TV adverts.Needless to say I have renewed with the existing company (first time we've renewed like this in ~ 5 years!!)

BREWERDAVE1:

Interesting point ; just got a renewal quote from our existing provider for car insurance, rather surprisingly it seemed very competitive, having only increased by ~ 4% from last year when we had been "new" customers.

Just be carefull that they have not made any changes to the cover or excesses, to keep the premium increase down. Some Insurers do this at renewal to retain policies, hoping that policyholder doesn't notice or are not bothered by the changes.

Huckster

Thanks Huckster, but I did check it vs last year's cover - the only difference was that last year they allowed me to pay over 12 months without a credit charge - they wanted an extra ~£20 for credit this year - I was going to pay a one off lump sum til the Customer adviser mentioned that I could pay quarterly for no extra charge! presume this is to keep me on DD - I don't care - I have the time now that I'm fully retired to keep on top of things like this!!

Some Insurers do not use comparasion sites due to the high amount they have to pay the comparison site to gain the business and that the contract with the comparison site contract gives them the right to sell the policyholder a new policy at renewal date.

Not to cause offence but do you have an official source for that? Surely the giants wouldn't stand for it?

I was told it by a very senior executive from a leading composite Insurer that had a direct arm and they begrudged paying the price as it was a large amount of the premium but in the current climate of achieving critical mass in the market they have no option but to have a presence on the comparison sites.

They pay a commission to the comparison site but are not likely to retain the customer at renewal as they would do if it was a broker introduced or direct customer as the comparison site will requote the client at the next renewal as obviously they earn additional monies by doing this. If they simply left it to renew with the Insurer they are missing out on additional revenues.

Access

Dacouch has a point, which I did not mention earlier as this is the MS forum, but I can offer a general point.

With comparison sites (CS), the Insurers have to pay the CS for each person that is transfered to the Insurers site, via the CS quote facility. If the Policy is then taken up, the CS then gets an additional fee.

I understand that the sum paid to the CS per transfer to Insurers site, purely after a quote, is only a few pence, but over a year, with millions of quotes generated, this would add up to a reasonable sum. Then if a policy is taken up, a further amount is paid and maybe at the renewal a further amount is paid.

To me this is all reasonable. At the end of the day, the Insurers have been able to obtain the business, without paying commision to a broker and not on the back of their own advertising. Direct Line (RBS Insurance) have one of the largest marketing budgets of all companies, certainly the largest in the Insurance industry. Perhaps they feel that having spent millions on advertising and being the No1 Car Insurer in terms of policies held, why would they want to pay commission to a CS.

Huckster