FCA to publish report on dual pricing by autumn

Andrew Bailey

The City watchdog will report on its investigation into dual pricing in the autumn, a conference heard.

Andrew Bailey, CEO of the Financial Conduct Authority, said the body was carrying out its own study on whether vulnerable customers were charged higher for remaining with the same insurer than those who shopped around at renewal.

Bailey, speaking at the British Insurance Brokers Association conference in Manchester on Wednesday, praised the work of Biba and the Association of British Insurers in drawing up guidelines for fairer pricing practices.

“As the guiding principles published by Biba and the ABI last week indicate, insurance customers’ loyalty should not be penalised, and it’s essential that firms are fully implementing our rules on renewal disclosure,” Bailey said.

He added: “We are currently in the midst of some work to better understand pricing practices in retail general insurance, focussing on home insurance. We expect to report our key findings in the third quarter of this year.

“Once we’ve concluded this discovery work, formalising the debate, we’ll assess whether we need to act to ensure future insurance pricing practices support a market that works well for its customers.”    

In a speech which covered pricing, data and Brexit, Bailey said a particular focus was on ensuring that vulnerable customers with a serious health issue like cancer knew where to go to get insurance.

He added: “Our concern here is that the market for travel insurance appears to be segmented between more mainstream and specialist providers.

“The former may have a limited appetite to insure more serious medical conditions. Specialist providers are prepared to insure consumers with these conditions, and quite often at lower premiums based on a more in-depth risk assessment. But consumers may often be unaware of the lower premiums offered by specialist providers.”

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