Paul Cullum from Frontier today joined fellow panellists Brian Corr (Head of Department, Competition Division, Financial Conduct Authority) and Jason Freeman (Consumer Law Director, Competition and Markets Authority) to discuss the general insurance sector at the Competition Law Challenges in the Financial Services Sector conference in London.
The panel discussed pricing practices in general insurance markets, which are currently being investigated by the Financial Conduct Authority (FCA). The Competition and Markets Authority (CMA) has also recently concluded an investigation into concerns raised by Citizens Advice that companies penalise existing customers by charging them higher prices than new customers, which looked at insurance, banking and telecoms markets.
The concerns around such pricing practices were discussed, and in particular the fairness of pricing practices where potentially vulnerable customers can pay higher prices for the same products or services. However, the discussion also considered the benefits of firms offering introductory incentives, which the CMA found in its investigation “can encourage people to shop around and try out new services, as well as allowing new businesses a foot in the door by attracting new customers”. The panellists considered potential ways to address concerns including more ‘policing’ of current rules, pricing interventions, and innovative solutions to help customers shop around.
Paul Cullum said “there is a lot riding on the FCA’s market study. It is likely to give a clear indication of the FCA’s appetite to see real change in this market, with implications for pricing in other markets – both in financial services and beyond”.
Frontier regularly advise on competition policy and the regulatory and commercial implications of pricing practices.
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