What’s on the Radar?
1. HOUSEHOLD INSURANCE STUDY PUBLISHED
The UK Financial Conduct Authority (FCA) has published a supervisory study, titled – Pricing Practices in the Retail General Insurance Sector: Household Insurance. The regulator had committed to such a thematic review in its 2018/2019 Business Plan, but the timing of its publication should be considered in the context of the recently announced ‘super-complaint’ submitted by Citizens Advice to the Competition and Markets Authority (CMA) about the ‘loyalty penalty’ paid by loyal and disengaged consumers in five consumer markets – one of which is household insurance.
The thematic review can be accessed here:
2. FCA LAUNCHES GENERAL INSURANCE MARKET STUDY
The thematic review described opposite recommends a package of measures necessary following this initial work. These include addressing the potential non-compliance by some firms with rules on transparency at renewal, a wider discussion paper on fairness of pricing in financial services, and a more intensive market study of general insurance pricing practices for home and motor insurance.
It will focus on the following key issues:
● The consumer outcomes from pricing practices
● The fairness of outcomes from pricing practices
● The impact of pricing practices on competition
● Remedies to address any harm that the FCA finds.
The terms of reference for the market study can be viewed at:
3. FCA BOSS WARNS OF FAILURES, DUAL PRICING AND RISK OF DISCRIMINATION
Andrew Bailey, chief executive of the FCA, has written to CEOs to clarify the FCA, expectations in relation to the risks of “significant harm and poor outcomes for consumers” found in its investigation into household insurance printing practises. He said the firms should act now to address any issues from the finding in the report. In particular, he emphasised that firms need to be able to “demonstrate” how conclusions had been reached when checking whether customers are being treated fairly, and that they must be clear who in the business is responsible for pricing decisions and – by extension – responsible for customer outcomes.
The ‘Dear CEO’ letter can be viewed at:
4. NEW STUDY INTO PERSONALISED PRICING LAUNCHED BY THE GOVERNMENT AND CMA
The UK government, led by the business secretary Greg Clark in partnership with the CMA, is to undertake new research into the practice of personalised pricing – where retailers target online shoppers and charge people different prices for the same items. It will explore how personalised pricing is applied through mediums such as search engines, apps or comparison tools and the extent to which this is preventing shoppers from getting the best deals.
For more information, please see:
Andrew Bailey, chief executive of the UK Financial Conduct Authority (FCA), has given a speech on Brexit at the Future of the City dinner in London.
The Financial Conduct Authority (FCA) is consulting on proposed amendments to rules on the purchase of products that provide consumers with guaranteed income in retirement (pension annuities).
The UK Financial Conduct Authority (FCA) has launched a public awareness campaign highlighting the 29 August 2019 deadline to complain about payment protection insurance (PPI).