The U.K. Financial Conduct Authority (FCA) on Thursday proposed that insurers be required to publish the details of the previous year’s premiums on renewal notices that are sent to consumers.
The proposals follow FCA research with over 300,000 consumers to test their reactions to including different types of information on insurance renewals, and the impact on whether people shopped around. The FCA found that including information about the previous year’s premium on renewal notices had the greatest impact, prompting between 11% and 18% of people to either switch insurers, or negotiate a lower premium with their current provider.
The regulator is now proposing to require insurers to include this information on renewals in a bid to address concerns that consumers pay higher prices if they simply renew their policies with the same insurer and don’t shop around for better deals. The FCA reports that it has found evidence of low levels of consumer engagement, infrequent switching, and a lack of competition when some types of insurance policies are renewed.
“We hope the proposals encourage more people to shop around for the best product for them. It is important that insurers give their customers the information they need to do this and ensure they’re treating their customers fairly,” says Christopher Woolard, director of strategy and competition at the FCA, in a statement.
The FCA is also “reminding firms of their obligations to treat customers fairly, and to consider how their approach to renewal pricing in general, and the treatment of long-standing customers in particular, delivers fair outcomes to consumers,” the regulator adds. It is seeking feedback on its proposals by March 4, 2016.