CII reacts to FCA findings on insurance industry pricing practices
The Chartered Insurance Institute has urged insurers to act now to address the FCA’s concerns about pricing practices.
Last week the FCA issued a feedback statement on Fair pricing in financial services.
Dr Matthew Connell, the CII’s director of policy and public affairs agreed with the FCA’s conclusion that ‘society’s view of the pricing practice is important’ because ‘If consumers do not believe firms are engaging in fair pricing practices, then there could be damaging effects on trust in markets and institutions and ultimately the integrity of the market.’
He further noted “Anyone who chooses to ignore society’s view of pricing practices will find that there are a large number of key players, including consumer groups and select committees who will ensure that the issue is high on the regulatory and legislative agenda.
“The real question is, will practitioners wait for these issues to be brought to their attention, or will they actively seek them out? The CII’s Trust Index, which was refreshed in June 2019, gives strong pointers to professionals about how they can improve public trust. “
By way of example, the CII’s index has identified renewal pricing and the different treatment of new and existing customers as an area for urgent action. The index identified the main areas of concern for purchasers of both personal and commercial insurance included:
- Pledging that the premium won’t increase because they are not a new customer
- Matching a cheaper price
- Offering a discount for staying with the same company
- Explaining no claims discounts more clearly
In this way the profession can contribute to better competition and trust in the market, building on existing initiatives such as the ABI and BIBA’s “Guiding Principles and Action Points for General Insurance Pricing”.
The Chartered Insurance Institute (CII), the leading professional body for the global financial services profession, exists to promote higher standards of integrity, technical competence and business capability. With over 115,000 members in more than 150 countries, the CII is the world's largest professional body dedicated to insurance and financial services.
Our membership covers all disciplines within the insurance industry (claims, broking, underwriting), those working in the life and pensions sector, the mortgage advice market and financial advisers (under the Personal Finance Society brand).
Our Royal Charter requires us "to secure and justify the confidence of the public" in our members and in the insurance and financial services sector.
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