Recently the Financial Conduct Authority released an assessment of the insurance industry, which lifted the lid on loyalty penalties, revealing insurers have been subjecting loyal customers to big premium hikes, knowing they are less likely to switch providers.
Now a new survey of 750 drivers aged between 17-24, published in The Young Driver Rip-Off Report, by new insurance platform honcho, suggests the lack of transparency from the insurance industry is deeper rooted than originally thought.
The study found that 88% of young drivers are unaware that many insurers are charged commission to sell their products on price comparison websites and 92% have no idea that these costs are often passed onto the consumer in their premiums.
As such, as many as 61% wrongly believe price comparison websites offer the best prices and just 11% claim to approach insurers directly when sourcing insurance quotes.
According to honcho’s research, price comparison websites typically charge insurers commission of £60 per policy sold, a figure which the consumer is often made to absorb – without their knowledge.
Once aware of this, 97% of those surveyed felt this was unfair.
The data also found that 84% had no knowledge that many price comparison websites are not independent and are in fact owned by insurers, which can compromise how objective their price comparisons are.
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