MoneySuperMarket: FCA pricing study needs to get the balance right

Leading PCW MoneySuperMarket has welcomed remedies proposed in the FCA’s pricing study, while warning that the regulator needed to “respect” the insurers’ business model and avoid “chipping away” at it. 

”It’s going to be good for customers, and generally anything good for customers is good for us”, Mark Felix, MoneySuperMarket’s commercial director for insurance told Insurance Times today. 

”Customers are overpaying. If you don’t compare and you auto-renew every year it impacts the customer. But there is a risk that an insurer needs to cover. You’ve got to get that balance right, which I’m sure the FCA will want to do.”

MSM will submit its opinions to the FCA within the six-week feedback window, he added.

Felix admitted that growth prospects in motor and home were limited at present, and MSM was looking at growing some of its other lines, such as travel, pet and life, with room for penetration by PCWs. ”There’s quite a lot to go after”, he said. 

Another development that could radically change the market is the roll out of rival GoCompare’s automatic switching service WeFlip earlier this year.

it currently caters to the energy sector, but the model could theoretically be applied to the general insurance market too.

”We’re obviously monitoring it, Felix said. ”Delegated authority is interesting. Customers are still wanting some element of control. Because this is money coming out of their bank account.

”It’s a wait and see. It will be a bit harder in insurance, because of the Insurance Distribution Directive. But if a customer trend emerges for something, we will respond. It’s still early days in energy, and early days in insurance,” he said.

When it comes to brokers, Felix said MSM does not see the difference between them and insurers. There are no active restrictions on brokers being on the site, he said, adding that it was all about finding “the right fit for the customer”. 

”For us [the relationship with brokers] is just about ’do you have a product that works for the customer’ and if so, ‘how do we build a strategic relationship with you?’ ”