Defaqto’s Star Ratings for 2008 have been more widely adopted by providers than ever before. The ratings, which have become the most authoritative and impartial guide to product quality available, cover products in the banking, protection, investment, pension and general insurance areasIn January Defaqto undertook the huge task of analysing the quality of just under 2,200 products in 24 separate product areas from 550 different suppliers. Defaqto used a set of quality criteria to assess each product in each particular area. From this analysis Defaqto was able to score each product and then assign it a Star Rating. The ratings ranged from five stars down to one star.
In total Defaqto assigned 252 Five Star ratings, 360 Four Stars, 571 Three Stars, 498 Two Stars and 511 One Star.
Defaqto licenses companies to use the rating in their promotional material and so far this year, Defaqto has licensed the use of 140 Five Star Ratings.
Brian Brown, Head of Insight at Defaqto said: “A Five Star rating enables companies to demonstrate to consumers that their products have reached the highest tier of quality. The rating, with its associated logo, is becoming a well-known statement of product quality in the market as more and more companies adopt it into their marketing plans.
“With the ever-growing emphasis on product cost, product quality has been in danger of being excluded from the purchase decision. A Five Star Rating helps to address this imbalance by identifying for consumers products which have been independently assessed for quality.”
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Main Star Rated Product Groups
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| Credit Cards |
Current Accounts |
Home Insurance |
Motor Insurance |
| Pet Insurance |
Travel Insurance |
Payment Protection |
SIPPs |
| Offshore Bonds |
Onshore Bonds |
Critical Illness |
Income Protection |
-Ends
For further information contact:
Defaqto Limited
Brian Brown, Chris Johnston or Luci Mylward
01844 295 454
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Following the announcement by Direct Line that from January 2008, new and existing customers who suffer damage to their cars caused by vandalism will not have their no claims discount disallowed should they make a claim. My question is, is there still a need for the traditional ‘No Claims Discount’?
The use of ‘NCD’ as a marketing tool has been prevalent within the last few years as insurers try to be innovative and want to be seen as providing the highest discounts in the market. Companies such as Direct Line and the CIS have introduced a new slant of the use of ‘NCD’, stating that all named drivers on its policies can earn their own ‘NCD’, whereas Esure has advertised the fact that its policyholders can get up to a “massive 75%” no claims discount.
This discount seems to have been around since the dark ages, and in fact it was first introduced by Cornhill Insurance in 1957. For fifty years motor insurance underwriting has used a ‘no claims discount’ scale when calculating insurance premiums. Therefore, is there now an opportunity to dispense with this out of date method? Gone are the days when the policyholder’s new insurer would require to see proof of any no claims discount earned, and most insurers now only require the previous insurer’s policy number.
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Findings by the British Insurers Brokers’ Association (BIBA), following its investigation into price comparison websites, confirm Defaqto’s own findings in its survey of aggregators for its Motor Insurance in the UK report[1] published in October 2007.
Defaqto carried out a detailed study of the services offered by 17 leading aggregator sites, including Moneysupermarket, Confused.com, GoCompare, Comparethemarket and TescoCompare. Key findings in the report were:
- 65% of the aggregator sites had ‘default’ positions for underwriting questions and, in effect, could complete these questions on behalf of the proposer.
- 53% of sites automatically defaulted to a voluntary excess of either £200, £250 and more worryingly £500
- From the quotations obtained, 59% did not actually state who the insurer was.
- Only 47% of the sites analysed provided a “comparison feature” which allowed the proposer to check policy cover information.
- Only 41% of sites actually transferred the correct risk information to the insurer’s/intermediary’s website.
- Only 41% of insurer/intermediary websites matched the initial premium given by the aggregator.
- Only 12% of consumers who applied directly to the insurer/intermediary’s own website were provided with the same premium as provided by the aggregator site.
- 88% of the insurer/intermediary websites needed the proposer either to ‘re-key’ or provide additional information.
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