Insurance Firms May Have To Help Compare

Insurance Firms May Have To Help Compare

Insurance firms may be forced to donate people a comparison between their previous premium & their renewal quote.

Proposals by the Financial Conduct Authority (FCA), aimed at helping consumers shop around for a better deal on their insurance, could come into force as early as March 2017.

The plans follow concerns that many people are paying more to stay with the same firm for coverage such as motor, home, pet & medical insurance.

Low levels of consumer engagement, switching & a lack of competition are among the things the FCA said had inspired the proposals.

Christopher Woolard, the FCA's director of strategy & competition, said: "It is significant that insurers donate their customers the information they need to (shop around) & ensure they're treating their customers fairly."

If the proposals became law, they could see firms issuing notices such as: "Your renewal quote for this year is £200. Last year's premium was £150. This is £50 more than last year. Remember: check your cover. Shop around for the best deal."

Huw Evans, director general of the Association of British Insurers, said the idea was a "good" one & something insurers had proposed to the FCA.

He added: "This will assist customers and encourage them to engage with the policy they select & what they obtain for their money."

Critics, however, say that such a alter could mean fewer introductory offers, as firms instead concentrate on keeping customers.

Keith Bowman, equity analyst for Hargreaves Lansdown Stockbrokers, said: "What we may see in the longer term are insurers pricing policies to retain clients, which would mean fewer introductory offers."

He added that early beneficiaries include the price comparison firms, with, for example, seeing their share price rally over 2% in late morning trading following the announcement.

Source: “Sky News”