What are the FCA Pricing Regulation changes to insurance?

The Financial Conduct Authority (FCA) is one of the insurance industry’s regulators. They’ve recently introduced new regulation on insurance pricing that takes effect on 1 January 2022.

When it comes to renewals, the regulation states that when a premium is generated for an existing customer, it won’t be higher than the equivalent quote for a new customer. This assumes that:

  • All the policy cover details are the same
  • The way the policy was bought is also the same (a phone sale premium, for example, might differ from the one you got if you bought through a price comparison website)

You can rest assured that esure is fully supportive of these changes and is committed to following the full guidance. Your renewal quote will always be the same or less than an equivalent new customer quote.

Other changes we have made based on FCA regulation include:

  • The option to opt out of having your cover automatically renew, at any time and without a fee
  • Providing more clarity when explaining premium finance costs (full payment versus direct debit) and the difference between the two options including the charge for interest and the premium finance agreement needed to pay monthly.

Why has my renewal premium gone down? 

Your premium may have fallen (a little or a lot) for a few reasons, including:

  • If you’ve made changes to your policy in the year
  • The way we rate your insurance risk
  • How we’ve adjusted premiums so you don’t pay more with us than a new customer would (when the renewal quote is generated) for the same level of cover. See the question, ‘What are the FCA pricing regulation changes to insurance?’.

For your peace of mind, your cover will remain the same (subject to any underwriting changes - see the ‘Renewal Update’ page in your renewal pack) and is Defaqto 5 Star rated as before.

Does this mean I’ve been overpaying for my insurance previously

No. What you paid with us at the time was correct for your specific policy and period of cover.  

When we generated the renewal premium(s) for your previous year(s), we’d have considered a few factors. These would have been the same for all customers and included:

  • Our risk on the policy at that time
  • The level of cover you asked for
  • Market pricing

I expected my premium to go down based on what I’d heard in the media. Why hasn’t it?  

If the price you pay for your policy hasn’t gone down, or has only reduced slightly, it’s because your premium is already in line with our new business pricing. 

The new FCA pricing regulation takes effect on 1 January 2022 and states that when a premium is generated for an existing customer, it won’t be higher than the equivalent quote for a new customer. This assumes that:

  • All the policy cover details are the same
  • The way the policy was bought is also the same (a phone sale premium, for example, might differ from the one you got if you bought through a price comparison website)

Will my renewal price go up due the FCA pricing regulation changes? 

Not necessarily. The premium we quote reflects all kinds of things, including:

  • The FCA pricing regulation changes (see the question, ‘What are the FCA pricing regulation changes to my insurance?’)
  • Changes in the market
  • Changes to how we rate your insurance risk 
  • Changes you may have made to your policy during the past year