In July 2013 we confirmed that we would make the sale of general insurance add-ons the focus of our first market study under our competition objective. We wanted to assess whether competition in the markets for general insurance add-ons was effective and, if not, why not. We also wanted to understand the impact of this on consumers.
We investigated the impact of the add-on mechanism by looking at five products as case studies. We mainly focused on the mechanism rather than the individual products selected, but we did draw conclusions about specific products where appropriate.
This report sets out our provisional findings. We found that competition in the markets for general insurance add-ons is not effective and that this can lead to poor consumer outcomes. Consumers are significantly overpaying when they buy products as add-ons.