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We explain the changes that the Financial Conduct Authority (FCA) brought in earlier in the year, and how it might impact you.
Earlier this year the Financial Conduct Authority (FCA) - the UK's financial services regulator - brought in some changes that have impacted the price of insurance in the UK.
Here is some information about the FCA’s Fair Pricing initiative.
Following an investigation into the value and the pricing of insurance products that were being sold in the UK, the FCA introduced new rules for insurance providers. These rules are designed to safeguard customers, making sure that providers give fair value and don’t penalise loyal customers, particularly when renewing their cover with their current provider.
The FCA found that some existing customers who remained loyal to their provider were essentially being ‘punished’, as their provider offered introductory deals to attract new customers, which were not available on renewal. This meant that some renewing customers were paying more than new customers for an equivalent policy. This practice was known as ‘price-walking’.
In the interest of protecting insurance customers, the FCA declared that from 1 January 2022, insurance providers must offer the same price for the same policy to both new and existing customers – which means a ban on ‘price walking’. These rules currently apply to property and motoring policies, including policies covering motorhomes and caravans.
How will this impact you?
Insurance providers who have not engaged in price-walking have mostly not had to make any changes to remain compliant. However, other insurers have found themselves having to increase new business prices, or reduce renewal prices, to ensure the two match.
Our broker partner for Motorhome, Campervan, Car, Home and Motorbike Insurance, Devitt Insurance Services worked throughout 2021 with the various insurers underwriting these products, to ensure that they comply with the rules and intention of the FCA changes. We, as a Club, found it encouraging that very few changes needed to be made, either by us or our partners and we hope that this reassures our members too. We do encourage you to check your cover and make sure that your provider and the policy is meeting your needs.
For the Club's Motorhome, Campervan or Car Insurance please contact 01342 649 919.