The regulation of price comparison websites is set to increase after the Association of British Insurers (ABI) joined forces with new trade body The Comparison Consortium.
It says the link-up will help bring "unprecedented" professional standards to the industry, adding a code of practice for online portals and professional guidance for the insurers that use them will be central to its work.
Price comparison sites have been criticised for allowing "desperate" insurers to leap to the top of results table simply by cutting prices and for their apparent inability to compare "like for like" products.
Richard Mason, acting head of the Comparison Consortium, says its work with the ABI will bring about a "greater level of clarity and transparency" to the market.
"Price comparison websites have revolutionised the insurance industry, and insurers have responded accordingly by adapting pricing strategies and becoming more price-creative," he says.
"However, while the trend of providing preferential policies and acquisition incentives is flourishing in response to the industry's need to be more competitive, this approach has led to a disparity in the way prices are displayed online.
"While comparison websites have become indispensible, it's time they realised customer decision-making doesn't solely revolve around price."
Graham Harvey, managing director of protection at Axa, says comparison websites have found a place in the market.
"They are a good starting point but still don't take away the need for quality advice," he says. "You have to be careful you are comparing like for like. It's dead easy to do with a camera, for example, but not so easy with protection policies."IFAonline
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