Comparethemarket welcomes CMA insurer contracts probe

BGL-owned price comparison site Comparethemarket has said it welcomes the Competition and Markets Authority (CMA)’s probe of some of its insurer contracts.

The CMA said yesterday that it was opening a competition law investigation of a price comparison site, which it did not name, over contracts that it said may have led to higher premiums on home insurance products.

The Telegraph later revealed that Comparethemarket was the price comparison site being probed by the CMA.

A Comparethemarket spokesman told Insurance Times: “We welcome the CMA’s conclusions that digital comparison tools are a force for good which lower prices for consumers and inject competition into markets.

“Comparethemarket.com has some simple contractual arrangements with home insurers to ensure that our customers always get the lowest available price. We welcome the opportunity to discuss this further with the CMA.”

The CMA banned so-called wide most favoured nation (MFN) clauses in 2014 following a probe of the price comparison market.

Under wide MFN clauses, price comparison sites prevent insurers and brokers from offering cheaper policies on other platforms.

However, the regulator allowed narrow MFN clauses to continue. These allow insurers and brokers to offer the policies cheaper elsewhere, as long as they are not cheaper through insurers’ and brokers’ own direct channels.

The CMA launched a fresh probe of the price comparison market in March 2016.