Britain’s financial markets regulator said it has launched a study into how general insurers price home and motor policies amid concern some have the potential to cause harm to vulnerable consumers.
The Financial Conduct Authority said the study would give it a deeper understanding of the scale of harm, who it affects and what actions may be required to improve the market.
The FCA said general insurance was a central part of the British economy, generating over 78 billion pounds in premiums for insurers, and with most adults having at least one product.
The study would look at consumer outcomes from pricing practices, the fairness of outcomes from pricing practices, the impact of pricing practices on competition and the potential remedies needed to address any harm found, the FCA said.
“If change is needed to make the market work well for consumers, we will consider all possible remedies to achieve this,” FCA Chief Executive Andrew Bailey said.
The study builds off initial analysis that found other issues with home insurance that could cause harm to customers, including firms failing to have appropriate or clear pricing strategies, governance and controls in place.
The FCA said it expected firms to look after the interests of all customers and treat them fairly, whether they were new or long-standing. It said it had written to the CEOs of firms to remind them of its expectations.
It had also found potential non-compliance by some firms with transparency when consumers look to renew policies, and would “explore all options to address this using the full range of its powers”.
The FCA also said it was calling for input to a discussion paper on fairer pricing by Jan. 31, 2019, and was working with the Competition and Markets Authority on an investigation into excessive pricing.