Insurers’ reluctance to share information with comparison websites may be reducing price competition in the home and contents and car insurance markets, the Financial System Inquiry interim report says.

“The main issue submissions raise in relation to insurance sector competition relates to aggregator access to information.”

The report proposes letting comparators use automated processes to retrieve quotes from general insurance websites.

“This would not give aggregators direct access to pricing models, but may provide a route to discover them.”

It also suggests developing representative categories based on key consumer characteristics, which could be used to compare premiums.

“The difficulty with this option would be developing enough categories so the majority of consumers fall within a category, while not creating too many categories, which could create complexity for consumers and compliance costs for insurers.”

Insurers’ arguments against providing data to aggregators include the complexity of comparing products given adjustments for individual circumstances, and the risk consumers may underinsure because of a focus on price.

“These concerns have not prevented aggregators from successfully helping consumers compare products in the life insurance, travel insurance and private health insurance markets,” the report says.

“Therefore, there may be scope to improve aggregator access to general insurance product information.”

The report calls for suggestions on ways aggregators can provide “meaningful comparisons” of policies with different coverage levels.

See ANALYSIS