How Comparative is Your Comparative Insurance Quote?

Recently the major online insurance comparison site, Hippo, was found guilty of presenting only certain deals to people looking for a comparative insurance quote.

Hippo had to pay a R1 million fine and R500 000 in costs in terms of a Financial Services Board (FSB) ruling.

The FSB found that between April 2011 and September 7, 2012 Hippo’s call centre agents “failed to consistently provide clients with the complete list of generated quotes”.

In several cases they provided customers with the cheapest quotations only. As a result, clients were not always in a position to make meaningful comparisons.

Comparative Insurance Quote – So we had a look…

We at wanted to see whether things had improved at Hippo.
We went to their site and asked for comparative life insurance quotes for life cover of R500 000 for one of extremely healthy middle-aged staff member (non-smoker) in her forties. She was a highly insurable, low-risk individual, we thought.

To our astonishment, Hippo returned just one life insurance quote. It was cheap, alright (just R112 per month) but it was not from one of the major life insurance firms.How Comparative is Your Comparative Insurance Quote

In fact, we had never heard of the life insurance company involved. It was Instant Life. An internet search revealed that the policy would be underwritten by Guardrisk, a member of the Alexander Forbes Group.
What’s more, the cover would expire when the insured turned 65.

So Hippo returned just one term life quote – not a whole life quote – from a single company. Not much means of comparison there!

We tried getting comparative quotes for another staff member the next day. And again we got a single quote from Instant Life.

Hippo’s website states that it also partners with Hollard Life, 1st for Women, One Life and other life insurers.

Why is Hippo sitting on information it should have provided in the way of alternatives?

Well, it probably has to do with the nature of Hippo and its ownership….

Comparative Insurance Quote – The FSB also found…

In addition to their first ruling, the FSB found that between December 2008 and August 2010, Hippo rendered financial services via its call centre and failed to tell clients that it was a Financial Services Provider (FSP).

Neither did they tell customers about the services Hippo could provide, its legal status and its relationship with product suppliers (various insurers).

Hippo belongs to the Telesure group, as do 1Life, Auto&General, Budget Insurance, Dial Direct, 1st for Women, Virseker, ibyyeco, Unity Insurance, Prosper, Virgin Insurance and Insurance Driven by the AA.
When you approach Hippo, you should be given quotes from any or all of these insurers. And also range of others.

That certainly didn’t happen when we tried Hippo for life insurance.

Gerry Anderson, FSB deputy executive in charge of market conduct, pointed something out. He said that genuine aggregators offer a variety of quotes from different providers need not be FSPs. They must, however, offer comparisons of what is available and leave it to you to make a choice and approach a provider directly.

If the quotes are limited to those from a certain group, this must be clearly stated, he says.

Comparative Insurance Quote – Bottom line?

Do your own homework when you want to compare insurance quotes, even if it involves visiting all the websites of the main insurers. Click on our list of life insurance companies above to find out where to go.

FYI, the parts of the code of conduct that Hippo breached state that:

* When an FSP renders a financial service to you, it must disclose to you the existence of any personal interest in the relevant service, or of any circumstance which gives rise to an actual or potential conflict of interest in relation to such service, and take all reasonable steps to ensure fair treatment of the client; and

* A direct marketer must, when rendering a financial service to or on behalf of a client, at the earliest reasonable opportunity furnish you with the following particulars: the direct marketer’s business or trade name; whether it is an FSP and the services it is authorised to provide; its contact details and that of its compliance officer; and whether it has professional indemnity cover.


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All info was correct at time of publishing