Why comparing the insurance market is a sham

A new survey in to online brokers and insurance comparison sites reveals that in many cases, wherever you choose to buy, you are often dealing with the same company.

The price you pay depends on two factors – what the firm decides to charge you and how good the deal is that they can negotiate with the provider.

These two factors decide the margin they can charge on top of the basic insurance cost for businesses expenses and profits and accounts for why insurance from the same provider varies in cost between firms.

In reality, what the consumer buys from an online insurers or comparison web site is a branded version of a policy offered from one of a select band of companies in each sector.

Take BISL – search Google for BISL and the name comes back linked with a host of big name car insurance providers, like Auto Trader, Bank of Scotland, Barclays, Halifax, HSBC, Lloyds TSB, Marks & Spencer, the Post Office and RAC.

The details come from a survey by financial market research firm Finaccord.

So, when you are negotiating car insurance with a brand you think you know and trust, the underlying insurance policy is underwritten by BISL.

The survey reveals that almost 1,500 car, home, pet and travel insurance schemes are handled by external brokers for web sites and insurance comparison sites.

Looking at business insurance Finaccord disclosed broker Towergate underwrites many policies for comparethemarket.com and confused.com, while Simply Business is behind Gocompare.com, Moneysupermarket.com and Tesco Compare.

The question the Insurance Blogger feels needs asking is why shop around on comparison sites if they source their products from the same white label companies and why not go direct to the sites?

The whole insurance marketing set up is a sham – with different brands slightly changing deals so consumers cannot directly compare them and then charging what they consider is the right figure for them to deliver the profits they want.

If you are looking for a good old fashioned insurance broker that you can really trust visit Quoteline Direct.

Posted by on May 16 2013. Filed under Blog. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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