Mohammed Khan
“Potential remedies to pricing and renewal processes can impact the industry hardest. 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.”
“Some of the proposed remedies are likely to shake up the industry, the FCA recognises supply side remedies are likely to create winners and losers but seem to be willing to take such risk and monitor the situation closely once the remedies are in place.”
“The FCA has concluded 6m consumers in the general insurance market are getting a raw deal, a third of which are vulnerable customers. The remedies proposed in today’s report are wide ranging and of significant impact if they go ahead. They impact pricing, renewal processes, enhanced communication and transparency requirements and expanding pricing and product governance requirements.”
“After a long wait, the range and depth of potential action will be a worry for the industry. The FCA calculates 6m consumers are getting a bad deal with a cost of £1.2bn annually if they were to pay average premiums. This is more than enough to justify tough tough proposals. ”
