QBE has joined the chorus against a mandatory independent comparison service for general insurance, but has flagged potential options for increasing transparency.

The insurer’s submission to a Senate inquiry says a website could provide consumers with a list of general insurers that offer particular products, plus financial guidance and education tools.

The Insurance Council of Australia (ICA) already has a website that provides insurer details for various types of cover.

“QBE does not consider that the establishment of a mandatory independent comparison service would operate to effectively improve competition or benefit consumers, particularly for complex insurance products such as home and strata insurance,” it says.

“If the inquiry, however, is minded to make a recommendation for an insurance comparison service, suggested ways forward could include the development of an independent product availability service similar to ICA’s Find an Insurer service.”

QBE says the Government could also consider extending the northern Queensland comparison service to be an information website with simple price and feature comparisons for products, updated on a six-monthly basis.

Both options would be comparatively cost-effective ways of increasing transparency, without adversely affecting market competitiveness, consumer behaviour or cover availability, the submission suggests.

Consumer group Choice says there is a lack of transparency and independence among some comparison site operators and potential conflicts of interest should be prominently disclosed.

It says consumers need more protection, even with best-practice disclosure requirements, to prevent financial hardship due to an avoidable misunderstanding about the suitability of a product.

And it warns that any new regulatory mechanism must be enforceable to ensure a consistent standard of information is provided to consumers across the entire market.

Choice says the General Insurance Code of Practice could be registered with the Australian Securities and Investments Commission, or changes could be made through the Insurance Contracts Act and regulations.

The Australian Competition and Consumer Commission in 2015 developed a guide for comparator website operators and suppliers, stating they should facilitate honest like-for-like comparisons, be transparent about commercial relationships and clearly disclose who and what is being compared.

“Given comparison websites are now a well-developed market and there are ongoing problems, it is time to explore the need to elevate this guidance to an enforceable industry code,” Choice says.