5th June 2022
Following the news that loyal motor insurance customers face premiums that are double that of new customers, despite Financial Conduct Authority(FCA) reforms, Ben Carey-Evans, senior Insurance Analyst at GlobalData offers his view:
“This news isn’t particularly surprising, as the motor market is so competitive and attracting new business is extremely dependent on value. The prominence of price comparison sites, and consumers being extremely likely to select the cheapest policy from the first page, means it is difficult for insurers to make profit on new business.
However, this will be disappointing for the FCA. Its reforms came into force in January 2022 and were intended to stop customers who renew their policies facing punishments for loyalty. GlobalData’s 2021 UK Insurance Consumer Survey found that that up to 65.6% of people in the UK still do this. Out of this 65.6%, 41.6% shopped around, but ultimately renewed with the same insurer, and 24% just renewed. A sizeable proportion of consumers are facing higher premiums than they should so it is advisable to at least check for other price options at renewal, especially given the cost-of-living crisis we are in at the moment.”
GlobalData Trends(135 articles)
FCA Ttrends(241 articles)