Little heads up on the loyalty discount thing from Cuvva;
The Financial Conduct Authority (FCA) gave insurance providers until today to share its progress in terms of making the necessary adjustments internally to meet the financial regulator’s new dual pricing reform rules, which are due to come into effect on 1 January 2022. The FCA hopes to assess if the industry will be able to meet its deadline.
Freddy Macnamara, CEO at Cuvva, says: “Insurance providers have just under five months to radically overhaul their business models to eradicate dual pricing for good in line with the financial regulator’s pricing reform rules that come into effect on 1 January 2022.
“In the short term car insurance premiums will rise as insurers try to avoid loyalty penalties. Overtime premiums should stabilise as drivers will no longer get caught out paying way more than they have to at renewal time. The FCA’s pricing measures are the much needed radical change for the insurance sector if it plans to operate transparently and treat its customers fairly into the future. With its implementation, at least it ensures the industry puts its best foot forward as it enters 2022.”
Under the new rules, insurance providers are required to offer existing customers premiums at renewal that are no higher than they would pay if they were a new customer.
According to the FCA, it estimates that by removing loyalty penalties and ensuring insurers operate more fairly, consumers will save approximately £4.2 billion over the next decade.