The cost of regulation of general insurance in the UK for consumers is £400 million ($965 million) a year, according to new research from the Association of British Insurers (ABI).

The research estimates that customers incur £122 million ($294 million) in direct costs from the regulations and £266 million ($642 million) in indirect costs from insurers’ compliance with the regulator’s rules.

The ABI says the research shows that general insurance regulation is not justified on cost-benefit grounds.

It says research into consumers’ experience of the new regime shows they have been deterred from shopping around, as the sales process is long and contains unnecessary information.

The ABI also says the Financial Services Authority should conduct new research into the impact of regulation on the market and adopt more principles-based regulations.

The UK estimates can be compared with the much smaller Australian market, where the Insurance Council of Australia says compliance issues now cost general insurers more than $100 million a year and consume between 10% and 25% of senior management and board time.