Moneysupermarket said that it suffered from the coronavirus pandemic last year as closed borders led to a collapse in travel insurance sales.
Revenue dropped 11% to £344.9 million in 2020, the company revealed on Thursday, with pre-tax profit falling by more than 24%.
Global borders have been closed to slow the spread of Covid-19, and even where they remained open travel has been slashed on recommendations from governments.
It led to “negligible” income from Moneysupermarket’s travel arm, which allows customers to compare travel insurance providers.
The high-volume travel insurance segment normally accounts for a significant proportion of Moneysupermarket’s customers, and without it being in full swing the number of customers it served dropped from 13.1 million to 11.5 million in 2020.
Revenue would only have dropped 4% if excluding the travel segment, the company said.
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Only the homes services division managed to avoid a drop, with its business staying flat at £68.8 million.
The insurance business dropped by 8%, the money business by 27% and the company’s “other” segment lost 11%.
“In 2020 the availability of credit products was a real challenge for Moneysupermarket, as banks and credit cards tightened lending criteria. This resulted in a less compelling range of alternatives for consumers,” said Dan Thomas, an analyst at Third Bridge.
“Players like Experian and Clearscore are also moving into Moneysupermarket’s territory offering competing services alongside their more traditional credit bureau products.”
He said Moneysupermarket and other price comparison services face a serious challenge from moves by the Financial Conduct Authority to crack down on so-called loyalty bonuses.
This happens when customers who switch their energy supplier, mobile phone carrier or insurance provider are later rolled onto a more expensive plan if they do not shop around.
He said: “The FCA’s price-walking proposals could lead to smaller differences between the insurance premiums offered to new and existing customers. Ending the practice of price-walking could lead to a reduction in switching volumes as customers are less inclined to shop around.
“Price comparison websites like Moneysupermarket could offset potential volume headwinds by negotiating higher fees with insurers as they seek to reflect the increased customer lifetime value associated with lower churn.”
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