The new rules follow coordinated regulatory and antitrust scrutiny of overcharging loyal customers.

By David Little, Victoria Sander, Gregory Bonné, and Anuj Ghai

On 28 May 2021, the FCA published a policy statement setting out new pricing practices rules for insurers and insurance distributors. The new rules follow a September 2020 consultation paper and final report. The FCA’s objective is to improve the way general insurance markets function, in particular by preventing firms from “price walking” customers (a pricing behaviour that the FCA considers anti-competitive) and ensuring that firms deliver fair value. The new rules also aim to increase transparency for customers who are renewing their insurance products.

Notably, the new rules:

• Prescribe the information that firms must give to customers whose insurance products automatically renew
• Include criteria that firms must take into account when determining whether a product offers value for money
• Attempt to prohibit price walking

The FCA believes that price walking distorts competition and leads to higher overall prices for customers and that regular switching can help to bring prices down.