The FCA is considering taking strong action against insurance policy pricing as competition “is not working well” for consumers of home and motor insurance. To tackle high premiums the regulator has warned it could ban or restrict practices such as raising prices for consumers who renew year on year. An alternative remedy the FCA has put forward will see policy providers have to automatically move consumers to cheaper equivalent deals. The markets watchdog estimates that around six million policyholders pay high prices and are not getting a good deal on their insurance. If those customers paying high premiums paid the average premium for their risk they could save around £1.2bn a year. FCA executive director of strategy and competition Christopher Woolard says: “This market is not working well for all consumers. While a large number of people shop around, many loyal customers are not getting a good deal. We believe this affects around six million consumers. “We have set out a package of potential remedies to ensure these markets are truly competitive and address the problems we have uncovered. We expect the industry to work with us as we do so.” The FCA has set out its interim findings and potential remedies following its study launched a year ago into how car and home insurers treat their customers. More than 45 million home and motor insurance policies were written in 2018, with the retail general insurance sector generating £24bn in revenue in 2017, the FCA says. It intends to publish a final report and consultation on remedies in Q1 2020.
The UK Financial Conduct Authority (FCA) is clamping down on high premiums for home and motor insurance. The regulator warned it could prohibit or restrict price hikes for customers who renew their policies every year. Approximately six million customers are paying higher premiums than necessary for their policies and could save £1.5bn ($1.2bn) each year if they paid the average premium price for their risk, the FCA said.