16:38 24 September 2014
The Competition and Markets Authority (CMA) has confirmed that the exclusive pricing deals between motor insurers and price comparison websites will be banned as it prevents the former from making their products more affordable to motorists.
The change is expected to typically lower car insurance premiums by around £20 a year.
The CMA has been studying the £11bn private motor insurance market since 2012 and it believes that many of the 26 million private motorists in the UK are paying too much for their insurance.
CMA’s research found that most deals between price comparison websites and insurers restrict competition and ultimately lead to higher car insurance.
"They certainly help motorists look for the best deal, but we want to see an end to clauses which restrict an insurer's ability to price its products differently on different online channels," said CMA deputy panel chairman Alasdair Smith.
The move, which is more likely to take effect by early next year, has been welcomed by Association of British Insurers.