U.K. Insurers Face Investigation over Pricing Practices
October 31 2018 - 6:21AM
Dow Jones News
By Adam Clark
U.K. insurers are under scrutiny from the Financial Conduct
Authority over pricing practices that may harm vulnerable
customers.
The FCA said Wednesday that it is launching a market study on
pricing of home and motor insurance policies to investigate whether
they are fair to customers and what their effects are on
competition.
"Our initial work has identified a number of areas of potential
consumer harm. We want to make sure that general insurance markets
deliver competitive and fair prices for all consumers," FCA Chief
Executive Andrew Bailey said.
"If change is needed to make the market work well for consumers,
we will consider all possible remedies to achieve this," he
said.
The regulator said its supervisory work has found longstanding
insurance customers end up paying significantly more than newer
customers, and that it had identified a risk of discrimination. The
FCA has sent a letter to the chief executives of insurance
companies reiterating the need to assess pricing.
The FCA will publish an interim market study report in the
summer of 2019, setting out its initial conclusions, before
finalizing its proposed remedies.
The Association of British Insurers said the sector will work
with the FCA to address issues raised in the report. The ABI said
insurers have already launched a plan to tackle excessive pricing
differences between longstanding and new customers.
Shares in London-listed insurers were largely up in morning
trade.
Write to Adam Clark at adam.clark@dowjones.com;
@AdamDowJones
(END) Dow Jones Newswires
October 31, 2018 06:06 ET (10:06 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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