The founders of financial product price comparison website Pocketwise have devised a plan to get around general insurers’ refusal to hand over their pricing.
They’re going to use insurance brokers to get quotes for site-users when the site branches out into car insurance next year.
Pocketwise is the brainchild of fintech entrepreneurs Binu Paul and Richard Dellabarca who hope it will grow to emulate the UK’s Money Supermarket, which is used by over 1.5 million British households each year to compare everything from credit cards to car hire.
Currently users of Pocketwise can compare and buy KiwiSaver funds, mortgages, credit cards and personal loans through the site, but next year Paul said it planned to move into car insurance.
“We started on the basis of looking at the two biggest household assets for most Kiwis,” said Paul. “That’s their home, and their KiwiSaver.”
That meant mortgages and KiwiSaver, but the aim was to cover every financial product on the market including travel insurance, the more than 1200 non-KiwiSaver managed funds, life and health insurance, and foreign exchange.
But where things get difficult is general insurance like car, and house and contents cover, because large insurers continue to refuse to share their pricing with price comparison websites.
To get around that, Paul said people using Pocketwise to compare car insurance would be referred through to insurance brokers who would gather quotes for them, but he expected the insurers to start sharing their pricing data allowing for instant quotes, should Pocketwise achieve the scale it hopes for.
“If we get scale, it will be extremely hard for them not to,” Paul said.
When rival price comparison website Glimp.co.nz launched in September this year, it adopted a similar scheme.
At the time Tim Grafton from the Insurance Council, the industry voice for insurers including Suncorp and IAG, said: “There’s a significant risk that people will purchase on price alone without informing themselves of the policies that lie beneath.”
Insurers feared that could trigger a race to the bottom.
Price was only one aspect of choosing an insurer. Others included the financial strength of insurers, and their willingness to pay claims, though no insurer reveals their claim decline rates, and nor are there any plans to make them.
Grafton said people who wanted quotes could already get them online from each of the insurers, or call them up on their freephone numbers.
But Paul said: “Give consumers the information, context, tools, and all the choices, and you would expect consumers to make better decisions.”
“You are never going to expect consumers to always make the best decisions. That’s utopian. It’s never going to happen.”
New Zealand was far behind places like the UK in the development of price comparison websites, but there was demand for them.
“People have far better things to do with their time than to hunt around for stuff,” Paul said.