How competitive is Motor Insurance

masser

When my daughter did not get the answer she wanted, on the phone with her proposed new car insurer she suggested that she might try someone else who will. She was surprised to be told that most of the insurances were through BISL anyway, so she would still get the same answer. So after a bit of research, we find, that "Compare the bloody meerkat" and lots of the wonderfully cheap insurance deals available via Martin's great website are actually from a company in Peterborough, called Budget Insurance or BISL. Now I don't know about you but I don't think that sounds very healthy and raises questions of just how competitive these quotes are and probably explains why some insurance companies will not have any truck with comparison sites. Particularly when one of those sites is actually owned by a huge insurance conglomerate. Perhaps "Strangle the Market/Meerkat" might be more appropriate. Can anyone calm my hysteria?

InsideInsurance

Confused.com is owned by the Admiral Group, Tesco Compare evidently is Tesco Financial Services etc etc.

The fact they are owned by a group that also sells insurance is not really that much of concern. One of the fear of insurers of going onto the aggregators was effectively opening up their rating tables to a channel which by-passed their own security systems for looking for "rate raiders" but worse still, to a competitor.

Unsurprisingly, to get the likes of RBS Insurance to open up to the aggregators the aggregators had to prove there was a lot of chinese walls between the different parts of the business.


On the more general thing, you need to understand how insurance distribution works. You have a group of people that are insurers, they carry the risk of insuring people and predominately create policies and pricings structures. Some of these are sold directly to customers and others are sold through brokers with the broker being able to set their own margins. In addition to brokers being able to sell the off the shelf products you will also find some will create their own policies and then go to different insurers and ask them to price it for them. Brokers therefore have a panel of insurers and intermediaries and will get quotes from multiple ones and present the "best" one to you. Each broker will have their own deals with insurers and finance companies etc and so as well as the core policy the secondary products (breakdown, tyre insurance, legal expenses) and finance can all vary.

To add to the complexity you also have intermediaries who are similar to insurance companies but dont actually carry the ultimate risk but instead have delegated authority, they likewise sell direct and via brokers.

Finally you have affinity deals which is the likes of Citroen approaching companies to have insurance branded in their name, they can approach brokers, insurers or intermediaries and can take a standard policy and rebadge it or create something bespoke to their needs.

For each of these you will find that they sell some products on some channels but not all, have different pricing structures depending on channel, different discounts, service propositions etc etc

There is a lot of competition in the market but there are some big players who take up a lot of the market.

Morph4610

BISL is one of the largest personal insurance brokers and it's true they front a number of major brands e.g. Post Office, Budget (their own brand), Autotrader. They also own Comparethemarket as you say. Admiral Group own Confused. com and Esure are the largest shareholder in Go Compare. So the industry is incestuos but no more so than others. The Price comparison sites do generally provide a decent summary of the most competitive prices available aside from the more challenging or niche risks like young drivers or classic cars

kingstreet

People think aggregator sites are brokers?

Where do any of them say they offer anything but a number of quotes and nothing more?

Are the people who think this also taken in by banks thinking they offer independent insurance or financial advice?

I despair.

Radsteral

maybe my circumstances are bit better..many no claim bonus, etc, though i have always found direct line the cheapest, even after using 3-4 comparision sites..
been with direct line 5 years in a row, and although know the golden rule of ''no automatic renewal'' the existing still comes the cheapest

Parking_Trouble

Be aware that Admiral also own Bell, Elephant and Diamond.

Somewhat confusing and misleading to the public who think they have greater choice than there really is.

InsideInsurance

Just because a company trades under different brands doesn't mean there isn't competition - in fact due to mergers and over zealous compliance departments etc in the past some of the brands within a company can be the most competitive. I remember not that long ago an incident when the Group CEO was being shown round a call centre by the Insurance CEO and listened into a series of calls and in the space of under an hour he counted 4 times when the agent gave a quote, was told the quote was higher than X (X being a sister brand) and the agent therefore undercut the premium.

Even if you do have better control of inter-company cannibalisation and rivalry etc many insurers operate different policies and pricing structures for their different brands. Its not really a big difference if XYZ insurance sells the Advanced Policy and Basic Policy or if they decide to set up XYZ as the peace of mind company providing only the Advance Policy and then Chav Insurance as a subsidiary selling only the Basic Policy. You still have two different products on the market.

Of cause you then also have brokers which really confuse people given the number of people on here that speak of their "insurers" and then name a broker.