GIPP’s Growing Impact on Price, Choice and Market Dynamics

in this article, Sarah Vaughan, Director at Angelica Solutions, unpacks how the regulation is reshaping the insurance landscape.

Four years since the introduction of the FCA’s General Insurance Pricing Practices (GIPP) regulation, the UK insurance market is seeing a shift in dynamics that’s raising fresh concerns.

Sarah Vaughan, Director of Angelica Solutions comments “While the rules have improved pricing transparency, they’ve also contributed to rising costs for consumers, reduced product comparability, and a growing complexity in how cover is structured and sold”.

A clear warning sign of this is that new business versus renewal premium ratios particularly in Motor are edging back toward pre GIPP levels, according to EY’s 2024 analysis of ABI data. “While some insurers have adjusted within the spirit of the regulation, others appear to be reintroducing legacy pricing behaviours through different mechanisms. The growing use of tiered or stripped-back products is a prime example, allowing price variation to persist under the guise of choice” comments Sarah.

Data and market trends point to a disparity in quote data vs actual premiums.  Whilst new business quotes have dropped by 15% over the 12 monthsto Q3 2025, average sold premiums only fell 10%. Given market dynamics, this implies that renewal prices have only dropped by around 7% undermining the fairness GIPP aimed to achieve.

Tiered and stripped-back products are proliferating. While these appear to offer choice, in reality they are increasing the risk of underinsurance and creating confusion among consumers, particularly those less familiar with the detail of coverage.

The decline of MGAs in personal lines is also accelerating. The increased regulatory burden, coupled with broader economic pressures, is driving capacity providers to shift toward commercial lines. This is reducing innovation and competition in personal lines and putting upward pressure on premiums.

“What we’re seeing is a textbook example of regulatory overcorrection,” comments Sarah. “Insurers have adapted understandably to protect profitability, but the net result is a market that’s more complex and arguably less fair to consumers than before.”

“There is also a concern that the industry is lacking clear long-term pricing transparency. Unlike sectors such as mortgages or energy, where consumers are offered forward looking pricing or fixed rates, insurance remains opaque.

“As GIPP matures, a thorough review of its macro impacts on pricing behaviour as well as improved product simplicity and differentiation and enhanced clarity on premium progression for both new and renewing customers is needed.

“The Irish market’s approach curbing price walking from year one but leaving new business rates open to competitive dynamics could provide useful insight for any review of the GIPP regulation.

“The insurance industry has an opportunity to lead the way in creating a pricing ecosystem that balances transparency, competition, and consumer trust. As we move forward, we must shift the focus from regulatory compliance alone to meaningful reforms that ensure sustainable and equitable pricing for all policyholders”.