Consumer affairs expert and economist Allan Fels says “serious consideration” should be given to a mandatory personal lines comparison website to increase competition. 

The major insurers in Australia have resisted taking part in personal lines comparators, arguing that they encourage a focus on price over quality of cover. 

In 2019 the Australian Competition and Consumer Commission (ACCC) recommended a national home insurance comparator be investigated by the Federal Government, but it came to nothing. 

However, with home premiums soaring and affordability issues worsening, Mr Fels says the idea should be revisited. Price competition grows most markets, he says, because lower prices expand demand. 

“The fact is that in all industries price comparisons are made by consumers formally or informally, with or without good information,” the former ACCC chairman told insuranceNEWS.com.au. 

“Sadly in some cases consumers have to work off poor or limited information. A good price comparison website enhances the quality of their choice and makes the quality of markets better. 

“As to the claim that price competition will lower the quality and scope of insurance, this is not borne out by the experience of price comparison websites in other industries.” 

See Analysis.