- Insurance providers are at the bottom of the list for contacting their customers about the coronavirus pandemic says Consumer Intelligence
- Reinsurers take a measured approach to April renewals says Willis Re
- CII supports the FCA stating how managers should identify who is able to work from home
- COVID-19 and low oil prices could weaken the credit quality of some insurers in the Gulf Cooperation Council (GCC) says S&P Global Ratings
- Juniper Research study indicates number of IoT(Internet of Things) connections will reach 83 billion by 2024, rising from 35 billion connections in 2020
- esure founder Sir Peter Wood to step down as Chairman-to be succeeded by Andy Haste
- Guidewire positive on increased cyber threats expired
- ICISA members call for a coordinated approach to support schemes across the European Union to meet the demands of COVID-19 pandemic expired
- Catalina completes acquisition of Singapore-based Asia Capital Reinsurance Group (ACR) expired
- SCOR/Channel appoints Coulson as senior underwriter on the political and credit risks team expired
- Willis Re appoints Rumball as Head of Speciality–North America expired
- Xenia completes acquisition of the trade credit business of Howden UK Group expired
16th February 2020
S&P Global comments on UK personal lines loyalty penalty issues
According to the UK's Financial Conduct Authority(FCA, about 6 million policyholders are paying a combined penalty for their loyalty to their insurers of about £1.2bn a year.
The FCA's interim report suggests that it may take a more interventionist approach than it has before, and media interest has been aroused by the vulnerability of some of the most affected customers.
Faced with the possibility of price controls, we are already seeing new, more customer-friendly products being launched by the industry's early movers.
In a new report published, S&P Global Ratings notes that although UK home and motor insurance does not seem an obvious place to start looking for social risk, the sector's business models have increasingly courted conduct risk. In September 2018, the FCA launched a market study to investigate renewal pricing practices in UK retail insurance.
According to the interim report the FCA issued in October 2019, it found a market that does not work well for customers. For example, most providers employ "price walking," attracting consumers by offering a low first-year premium, then increasing rates year-on–year thereafter. As a result, one in five policyholders are paying 50% more than the going rate for their home insurance.
Of the customers being overcharged, a significant proportion are considered vulnerable, because of illness, recent major life events, or limited money management skills. We expect the media coverage surrounding the issue of renewal pricing, particularly its impact on vulnerable customers, to further increase social risk for UK motor and home insurers.
S&P Global Trends(513 articles)
FCA Trends(191 articles)