UK Bans Insurers' New Customer Discounts

UK Bans Insurers from Differential Pricing for New and Existing Customers. This move aims to address the disparity where loyal customers paid significantly higher premiums compared to those who switched insurers regularly

Certainly! Here is the information about the recent change in the UK insurance industry:

UK Insurers Banned from Offering Cheaper Deals to New Customers

  • In a recent overhaul, regulators have barred insurers from charging existing policyholders higher prices at renewal compared to what they offer new customers.
  • This reform tackles the long-standing issue where customers who regularly switched insurers paid significantly lower premiums than those who renewed their policies.

Here are the key points:

  1. Price Equality: Insurers must now offer the same price to both new and existing customers during policy renewals.
  2. Savings for Loyal Customers: Sad for price-chasing households, but loyal customers can save £120 yearly on renewals.
  3. Ending “Price Walking”: The reform targets ‘price walking,’ where insurers lure in new customers with low prices, then raise premiums later.
  4. Distorted Market Dynamics: Price walking distorted the insurance market, especially in home insurance, with renewing customers charged double or triple what new customers paid for the same coverage.
  5. Consumer Savings: The FCA predicts these reforms will save consumers £4.2 billion in the next decade.

UK's Bold Move: Equal Pricing Mandate Levels the Playing Field in Insurance

Remember, staying informed about your insurance options and making choices that best suit your needs is essential.

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