Regulator probes UK home, motor pricing
The UK Financial Conduct Authority (FCA) will more thoroughly examine home and motor insurance pricing practices after a preliminary review.
“Our initial work has identified a number of areas of potential consumer harm,” CEO Andrew Bailey said. “We want to make sure general insurance markets deliver competitive and fair prices for all consumers.
“This market study will help us examine the outcomes from general insurance pricing practices and inform how, if necessary, we should intervene to improve the market.”
The FCA is seeking input for a discussion paper by the end of January, and will then publish an interim report during the UK summer and a final report by the end of next year.
The regulator says it is aware the industry is already acting on excessive differences between premiums charged to new customers and those renewing.
FCA figures released last week show motor and transport insurance complaint numbers grew 10% to 252,043 in the first half of this year, while “other general insurance” complaints increased 11% to 224,398.
Complaints across all regulated financial services sectors grew 10%, rising for a fourth consecutive half-year to a record 4.13 million.
Payment protection insurance complaints gained 11% to 1.72 million, representing 42% of the total, while bank current accounts and credit cards were the next most common areas.
“It is clear firms need to look at the cause of the rise in complaints and address these issues to prevent further increases,” Strategy and Competition Director Christopher Woolard said.
“It should be a priority for firms to ensure good consumer outcomes are achieved and they should be making sure they are taking the right steps to treat customers fairly.”