The FCA has published the final report of its market study into General Insurance pricing. This proposes that when a customer renews their home or motor insurance policy, they pay no more than they would if they were new to their provider through the same sales channel. For example, if the customer bought the policy online, they would be charged the same price as a new customer buying online. Firms would be free to set new business prices, but they would be prevented from gradually increasing the renewal price to consumers over time (known as ‘price walking’) other than in line with changes in customers’ risk.
Enhanced product governance rules are also proposed, requiring firms to consider how they offer fair value for all insurance products over the longer term. The new rules are likely to present a new raft of compliance issues for insurers and brokers in the UK.