Commenting on today’s publication of the FCA’s General Insurance Pricing Practices Market Study, Huw Evans, the ABI’s Director General, said:
“The ABI agrees with the FCA that the household and motor insurance markets do not work as well as they should for all customers, and we continue to support the FCA’s work to address this.
“Insurers and brokers have already begun to tackle the issue of excessive price differences between new and existing customers through an industry initiative that has seen over 8.5 million pricing interventions across home and motor insurance worth £641 million.
“It is vital that price comparison websites and insurance brokers are subject to the same level of supervision and monitoring by the FCA to ensure a balanced approach.
”We will consider carefully this package of proposals, so that we can engage with the FCA on the most effective measures possible. There are winners and losers in the way the market works currently with those who switch insurance provider every year often ending up with lower prices. The FCA has confirmed that insurers have not made excessive profits.”
Industry initiative to help tackle excessive premium differences between new and existing customers.
The Guiding Principles and Action Points for General Insurance Pricing (GPAPs) initiative was launched by the was launched by the ABI and BIBA (British Insurance Brokers Association) in May 2018 to help address excessive price differences between new customer premiums and subsequent renewal premiums. At the time, the insurance sector was the first industry to take positive, collective action to address the issue of long-standing customers.
Commitments included insurers reviewing their approach to customers on their books for five or more years and reviewing outcomes for vulnerable customers.
The initiative is having a positive impact. A two-year review of its implementation in May this year highlighted that there had been over 8.5 million pricing interventions across motor and home insurance over the 20 months included, worth a total value of £641 million. Individual firms reported an average saving per intervention ranging between £40 and £150 (for the majority of interventions)
Further details can be found here.
-ENDS-
Notes for Editors
Enquiries to:
Malcolm Tarling 020 7216 7410 Mobile: 07776 147667
Laura Dawson 020 7216 7338 Mobile: 0772 5245838
Sarah Aspinall 020 7216 7412 Mobile: 0772 5245297
- The Association of British Insurers is the voice of the UK’s world leading insurance and long-term savings industry.
A productive, inclusive and thriving sector, we are an industry that provides peace of mind to households and businesses across the UK and powers the growth of local and regional economies by enabling trade, risk taking, investment and innovation. - Skype and FaceTime are available for broadcast
- More news and information from the ABI is available on our web site, abi.org.uk.