USwitch expands its product range to weather the storm

Price comparison site uSwitch is expanding its product range (MW last week) as it faces up to increasing competition from rivals such as Moneysupermarket.com.

USwitch, which is reeling from the loss of four senior executives in the past few weeks, is also one of a number of price comparison sites to have come under fire from bodies such as the British Insurance Brokers’ Association (BIBA), which believes the sites should be regulated to ensure they are not misleading the public.

Some question whether consumers know how switching sites make money. One industry insider says: “I’m not sure people know there’s a middle man. They take money out of the industry and don’t put anything back.”

Prices push popularity
Despite these fears, price fluctuations in the energy market have caused switching sites to grow in popularity. Ofgem announced earlier this year that switching levels had reached 5 million – the highest in five years.

USwitch was founded in 2000 by a team that included Barry Hollo-way, Andrew Salmon, John Miller and Vip Amin – all of whom have left the company in recent weeks. USwitch was taken over by US media company EW Scripps in March 2006.

USwitch director of products Nick White says the site was founded by “some guys who very much had their fingers in the utilities industry”. The company went from door-to-door selling to online and is still the market leader in the utilities sector. In 2004, it added financial services to its remit and, more recently, mortgages. White adds that uSwitch is now looking at travel insurance: “The aim is to have a proposition broader than we have now. The space we are in is incredibly competitive.”

Customer perceptions
He says he is aware of the perception some people have of price com-parison sites. USwitch has signed up to a voluntary code of conduct and White adds that the site will “embrace anything that improves consumer perception”.

But he argues: “Switching brings competition to the market. I fundamentally believe that what we do is a good thing.”

It has been suggested that the most effective way to regulate price comparison sites would be to have a regulator for each sector. However, White believes that would be a “very painful” solution. He adds: “It would be better if there was one that sat across everything.”

USwitch has just added advertising to its site, although it has been limited to banners and skyscrapers. The Energywatch code of conduct does not allow the company to advertise energy companies on the site.

USwitch’s new management team – led by Salmon’s replacement Alan Tattersall – must negotiate the threat of increased regulation, while finding ways to compete with bigger rivals such as Moneysupermarket.com. But some believe its lower profile may work in its favour as consumers become more aware of the way switching sites work.