BIBA Response to the publication of the CMA study on digital comparison tools

29th September 2017

BIBA made a significant contribution to the CMA investigation into Digital Comparison Tools (DCTs) and we are pleased that they have acknowledged the issues we raised with them especially in expressing their strong concerns, and one investigation, around some types of contract between suppliers and DCTs.

In our consultation submission we raised concern about the use of so called ‘most favoured nation’ clauses (MFN) which prevent providers offering their products at lower prices via other platforms and which also contributes to an undue focus on price in respect of comparing insurance products. Wide MFN clauses were deemed anti-competitive in 2015 and were subsequently outlawed and we called for this ban to extend to narrow clauses. We believe that taking action against such anti-competitive clauses would be a positive step and we support any progress that will allow insurance brokers the freedom to offer their products at similarly competitive rates direct to customers. We support the CMA keeping these practices within their radar.

We welcome the fact that the CMA has listened to our concerns around the presentation of excesses in insurance on DCTs and will investigate this further but we continue to have concerns that the emphasis on premium leads to a ‘hollowing out’ of policies in order to provide them at the cheapest possible rate. The CMA has recommended that the FCA considers both how excess are used when generating a quote and how it can build on its work to facilitate accurate like-for-like comparisons that incorporate non-price factors and we look forward to the outcome of these considerations.
Finally, we applaud the setting of ground rules for all DCTs relating to the use and transparency of personal data and on the need to clearly display important information especially as the investigation found some instances of inaccurate, unclear or misleading results being presented.

Read more about the study here