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For years now, there have been concerns about the way in which insurance is bought online.

Brokers v Tick-Boxes: The Playing Field Will Level

March 2018


The reasons why clients prefer to use a professional insurance broker, rather than price comparison and aggregator websites, are likely to be reinforced by the end of 2018, as regulators seek to create a more level playing field when it comes to professional standards.

For some years now, there have been concerns about the way in which insurance is bought online, with customers having to work their way through a series of tick-boxes that sometimes do not exactly fit their individual requirements. Such a process may also encourage the busy purchaser to click on what looks like the best option, simply because they do not really know how to answer a question.

Price comparison sites tend to rank results purely on the basis of price competitiveness, rather than considering whether or not a policy is right for the individual customer and their needs. Consequently, it has been difficult for the customer to easily compare product quality.

Additionally, customers using these sites have not always understood how comparison websites earn their money, with some thinking this is through advertising, others believing it is via click-throughs to provider websites and some stating it is via commission payments.

However, change is on the way in 2018. The new Insurance Distribution Directive, due to come into force in October 2018, is set to enhance consumer protection within the insurance-buying process. Firstly, it will require all personnel involved in insurance sales to undergo at least 15 hours of continuous professional development each year.

Secondly, anyone selling insurance will have to disclose the obligations of the contract, supply in-depth information about the risks insured and make it clear who pays for their service and how that payment is taken.

Experts believe such requirements will make it more complex and costly for direct insurers and price comparison sites to sell insurance, whereas brokers have been used to guiding customers through this process for many years. Deloitte says online insurance providers will have to ensure that the customer journey through their site, and the underlying algorithms used, adhere to these new legal requirements. This will not be an easy process.

This legislation has been described as a “levelling of the playing field”. But whatever it is called, there has probably never been a better time to place your trust in your broker and to be guided through the options most suitable for your needs, rather than trying to guess what they are.

For a full risk assessment of your needs, please get in touch to find out how we can protect your business and ensure you have the right cover in place.