Comparison Websites

Professor Catherine Waddams, a competition expert, has warned that comparison websites 'have an obvious incentive' to feature the companies that offer them the most. Health insurance comparison sites are one very convenient way that helps people to look for the best health insurance for them and their family. In theory they provide a comparative summary of all the companies that provide what you are looking for.

However, Professor Waddams told BBC Radio 4's Money Box programme that financial comparison websites 'have an obvious incentive to feature companies that give them the best rewards and companies have an obvious incentive to be featured prominently.'

Ms Waddams warned the public to be sceptical and make sure that they are not being taken for a ride. Only three out of the five sites she reviewed are open about how they make their money.

There are several ways in which sites make their money including the extra payments for sites that are featured more prominently. Other ways are 'click throughs' were a health insurance company will pay the comparison site for every person that clicks onto their site. Other ways for the comparison sites to make money is when people actually apply for insurance with a company.

It's a big market with over 5 million people a month using comparison sites.

Richard Mason, managing director of comparison site moneyextra.com, said that in his opinion it should be clear which sites are sponsored and which are not.

It is also important to be aware that not all companies are on every comparison site. Some do not wish to be included and others do not have web technology which is compatible with the comparison sites.

Recently a Code of Practise has been drawn up to help make comparison websites as transparent and accessible as possible.

Sue Regan, Chief Executive of the Resolution Foundation said:

'With the roll out of a national money guidance service next year, there is likely to be even more consumers turning to comparison websites to purchase financial products. This code of practice is a positive first move towards consumers having all the information they need when they make a financial purchase. It is a welcome first step in self-regulation of the comparison website sector.'

The problem for the consumer is that the medical insurance market is huge. Comparison sites provide a good way to get an overall picture of the medical insurance market quickly but it is still important to do your own individual research and make sure you are happy with the information that is presented to you.