Online insurance broker iSelect has attempted to defend its commission structure as it prepares to list on the stock exchange.
iSelect, valued at $300m, is reported to be planning to list in the first half of this year. The brokerage,which sells car and health insurance, said it has always been open with customers.
This comes as insurance players criticised aggregators for contributing to soaring policy costs.
Health insurer Medibank Private sells its AHM products through iSelect. Managing director George Savvides said aggregators had done nothing to make insurance cheaper.
He told the Sydney Morning Herald that comparison sites “haven’t really changed the dynamics of affordability. In fact, I’d argue they’re adding to costs because of the commission.”
iSelect CEO Matt McCann defended its commissions. “Our incentive is for when a consumer is well advised about a product that’s right for them, they should stay in that product,” he said. “Sometimes a word like 'churn' gets used. Churn is where a comparison site […] actively goes back to a customer and says to them, 'You should move somewhere else', without regard for their needs or personal circumstances. That is something that we don't do.''
McCann said providers that used comparison sites were ''doing it in a cost-effective way'' because they were able to ''build products that suit customers without the need for mass-market advertising''.
iSelect recently settled a legal case with Bupa, in which the health insurer accused the broker of making dubious advertising claims. Bupa does not sell its products through price comparison sites.
iSelect declined to comment to Insurance Business on the potential listing.