Insurance: Costs
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential implications for her policies of recent trends in levels of renewal premiums for insurance.
Answered by Emma Reynolds
The Government has not made an assessment. The Government does not set the terms, conditions, or prices for insurance policies. Insurers make commercial decisions about pricing based on their assessment of the relevant risks.
The Government is determined that insurers should treat customers fairly and the Financial Conduct Authority (FCA), as the independent regulator of the insurance industry, requires firms to ensure their products offer fair value. The FCA has stated that it will monitor firms to ensure they provide products that offer fair value and will take action if necessary.
In 2022, the FCA introduced rules that require firms to offer a renewal price that is no greater than the equivalent new business price the firm would offer to a new customer. The FCA estimated that these new rules would save consumers £4.2 billion over ten years.
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