Economy

Why six million insurance policyholders are not getting a good deal

Why six million insurance policyholders are not getting a good deal”

"That includes people who have been with the same insurer for years".

FCA Executive Director of Strategy & Competition Christopher Woolard added: "This market is not working well for all consumers".

The report makes grim reading, the key finding being that 6m customers pay high prices and many loyal customers are not getting a good deal.

David Williams, managing director, underwriting & technical services, AXA Insurance (UK), said: "Like the FCA, we believe that transparency is crucial and technology can play a role in tackling the issue of dual pricing". "We expect the industry to work with us as we do so".

In September 2018, Citizens Advice made a "super-complaint" to the Competition and Markets Authority (CMA) over loyalty pricing in five markets, one of which was home insurance. The FCA said it launched the study because it was "concerned about the potential harm to consumers from pricing practices". The most significant are: "restricting or banning pricing optimisation linked to how likely consumers are to renew, require automatic switching to lower priced products offering the same level of cover and banning auto renewal or making it opt-in only".

Other potential remedies under consideration include restricting the way that firms use automatic renewal, which could discourage switching.

Insurance firms will also have to publish information about price differentials between customers.

The insurance industry knew it was coming - but was it truly ready for the extent of the FCA's interim report into its market study on general insurance dual pricing?

A final report from the FCA is scheduled for the first quarter of next year.

More news: Novak Djokovic downs John Millman to win his first Japan Open title

Make firms be clear and transparent in their dealings with consumers - including improvements to the way firms communicate with their customers.

The regulator said it was keen to harness the benefits of innovation so that general insurance markets benefit positively from technological developments.

While the report may have appeared damning to the insurance industry, several chose to see the cup half full and focused on the positive signs that appear to be emanating from the FCA's earlier actions.

It claims that most firms, when setting a price, include their expectations of whether a customer will switch or pay an increased price.

"At the moment these are just proposals. The FCA must now follow through on these bold ideas to stop loyal insurance customers being penalised". "It is important that any unintended consequences are carefully considered to ensure that a fair and balanced approach is achieved for all customers".

The Association of British Insurers said it agreed that home and motor insurance markets could work better for customers who do not shop around at renewal, and that it would work with the regulator on the issue.

Longstanding customers pay more on average, but even some people who switch pay higher prices, it said, while those with lower financial capability, on incomes below £30,000 and who bought combined contents and building insurance often paid more.

Similarly, James Blackham, CEO and co-founder of By Miles, is in support of the FCA's efforts although he pointed out that "time is running out for the regulator to make meaningful change".



Like this

loading...
loading...

Latest


07 October 2019
Manchester United make history with pathetic attacking display vs. AZ Alkmaar
Manchester United failed to have a shot on target in a UEFA Europa League game for the first time in their history (25 games). Sevilla, the most successful team in the Europa League made it two wins from two after with a 1-0 home win against APOEL.

07 October 2019
Liverpool welcomes Brendan Rodgers and Leicester City to Anfield
He said: "I honestly can't think of a tougher opponent to face in this moment at Anfield and I know they will be very motivated". The three-man midfield unit is also likely to remain unchanged, considering the magnitude of the game. "He's a top manager".

07 October 2019
BP CEO Bob Dudley to retire
Dudley is succeeded by Bernard Looney , who is now director of Upstream, the oil exploration and extraction division. From 2003 to 2008, Dudley was president and chief executive officer of Russian oil company TNK-BP.

07 October 2019
Rachel Maddow Has a Role in The CW's New 'Batwoman' TV Series
When I do fight sequences and stunts as Batwoman , I do the Alexander Technique , where we study the bat and study the movement. The actress said the first time she tried on Batwoman's version of the cape and cowl, it felt "incredible. like a second skin".

07 October 2019
Man shot dead by father-in-law in birthday prank gone wrong
A Florida man killed his own son-in-law who was there to surprise him for his birthday, but no charges will be filed. And it's a fenced yard, and somebody jumps out of the bushes, I mean, you can't really say anything against Mr.

07 October 2019
Dan + Shay Team Up With Justin Bieber For New Song
Cash clearly a difficulty of their luscious lives as Justin just lately shared the scratch Hailey triggered on his Lamborghini. The proud mama has often gushed about her talented son, but this is the first time fans have heard her rave about Baldwin.

07 October 2019
Jalen Ramsey Hangs Out With Deshaun Watson In Houston
Coach Doug Marrone told reporters Friday that Ramsey won't play in Week 5 and he likely will see a specialist soon. It wasn't until the past two weeks, however, that his back put his playing status in doubt.

07 October 2019
Tom Holland Saves Spider-Man, Brings Him Back To The MCU
Spider-Man is a powerful icon and hero whose story crosses all ages and audiences around the globe". If not, here's a quick recap: Sony owns the movie rights to the character of Spider-Man.

07 October 2019
National Football League found Vontaze Burfict committed second helmet-to-helmet hit
Whitehead, who wore a hat with Burfict's No. 55 on it when addressing reporters Wednesday, compared Burfict to a "brother". Bell made it very clear he thinks the National Football League finally did the right thing by suspending him.

07 October 2019
Paralysed man walks again using brain-controlled robotic system
The 28-year-old man, who is paralyzed from the shoulders down, successfully used the exoskeleton to walk in a recent trial. Within the safety of a lab setting, he was also able to control the suit's arms and hands, using two sensors on his brain.