Watchdog to cut car insurance bills in Northern Ireland
Northern Ireland motorists should see a decrease in their car insurance policies of around £20 under new proposals by the competition watchdog.
After a three-year investigation into the £11bn UK car insurance market, the Competition and Markets Authority (CMA) has called for exclusive agreements between price comparison websites and insurers to be banned.
Some websites have contracts with insurers that stop them offering their products cheaper somewhere else, which the CMA said restricted competition and created higher premiums.
Alasdair Smith, chairman of the Private Motor Insurance Investigation Group and CMA deputy panel chairman, said that while price comparison sites had in the past helped motorists look for the best deal, there should be "an end to clauses which restrict an insurer's ability to price its products differently on different online channels".
This, Mr Smith added, should lead to greater competition between price comparison websites.
Rachael Cray, head of money affairs at the Northern Ireland Consumer Council, praised the CMA's proposals and said that they should "reduce the price for everyone purchasing private motor insurance in the United Kingdom by around £20".
However, Richard Willis, managing director of Willis Insurance in Coleraine and Belfast, said that while premiums may indeed fall in the short-term, in the longer term any reduction could well be wiped out.
"Inevitably, an increase in competition will depress pricing for car insurance and consumers should see prices reduced," Mr Willis added.
"However, as prices are reduced and margins become lower for insurers in the face of increased claims costs, then the net effect to the consumer can be negated.
The four largest price comparison websites are comparethe market.com, confused.com (which is owned by the insurer Admiral), GoCompare (owned by insurer esure) and MoneySuperMarket, the report said.
These four companies make up more than 95% of all private motor insurance sales made through price comparison sites.
Northern Ireland motorists already pay significantly more for car insurance than drivers in the rest of the UK.
The average cost of a policy here is £681, which is 18% higher than in the UK, where the average policy is £579, according to confused.com.
Drivers in Northern Ireland are also less likely to shop around for the best deal for their car insurance, compared to the rest of the UK, which then leads to higher premiums.
Only 54% of Northern Ireland motorists look about for a bargain, compared to around 73% in Britain, the consumer council warned.
The report also recommended that the Financial Conduct Authority investigates how consumers are sold add-on products, such as breakdown cover or personal injury cover, to their car insurance policies.
The competition regulator said that the way that these products were "sold makes it hard for customers to obtain the best value", with the sale of no-claims bonus protection "giving rise to particular concerns".