In order to see whether insurers are demonstrating emphasis on the core values of treating customers fairly, the Financial Conduct Authority (FCA) has announced the launch of a new market study into the general insurance practices of insurers, particularly when it comes to the charges that customers face for both those that are new and those that demonstrate a level of loyalty. This new market study will be focusing on two of the most commonly held insurance products, which are motor insurance and home insurance. This study is set to enlarge the regulator’s emerging work on how insurers utilise information and data on personal characteristics to price their policies across the different groups of customers, and in particular, those that are classed as vulnerable.
As well as announcing the new market study, the Financial Conduct Authority has also published a discussion paper which outlines its approach to considering the fairness in pricing in general. Both of these publications are available on the FCA’s website and they have received extensive coverage on the media, which clearly indicates the level of interest on this topic.
This announcement from the Financial Conduct Authority follows the concerns that were found during its supervisory work and the previous publications, such as the July 2018 research note on price discriminations in financial services. There were four main issues that the Financial Conduct Authority had found relating to pricing practices which the new market study will focus on. These areas are the consumer outcomes, the fairness of outcomes, the impact on competition, and the remedies to address any harm the regulator identifies. The information gathering process is due to be completed by the end of January 2019, with an interim report in the summer to be followed by a discussion on any remedies proposed by the end of 2019.
About the Author
Stuart Mosley (CeFA, CeMap, CLTM) founded SJ Financial Solutions in June 2005 having spent 12 years with big corporates such as Halifax and Santander. He felt the personal touch and straight speaking was missing from financial and mortgage advice services and set up SJ Financial Solutions to change this.
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