U.K. Insurers Face Investigation over Pricing Practices

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 [e-mail]; @AdamDowJones

(END) Dow Jones Newswires

October 31, 2018 06:06 ET (10:06 GMT)

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