British Insurance Brokers' Association: Brokers Will Be Key in Helping FCA Achieve Its Aims for Fairer Pricing

LONDON, England, Sept. 23 (TNSRep) -- The British Insurance Brokers' Association issued the following news release:

The British Insurance Brokers' Association (BIBA) supports the FCA pricing report desired outcomes of enhanced competition, and long-term fair value for customers. As we stated in our response to the Market Study Interim Report MS18/1.2, we believe that although most brokers are not responsible for setting prices, they are very much part of the solution for customers.

The focus on equalising renewal premiums with new business prices reflects the concerns already raised and it is pleasing that the regulator recognises the good work that has already been achieved through market collaboration particularly by the application of the BIBA/ Association of British Insurers; General Principal and Practices on Pricing (GPAPs). The level of awareness of GPAPs is currently at 89% among BIBA member firms which have long been keen to reduce the practice of dual pricing and have combatted it by either routinely re-broking or doing so if the price has increased.

We are pleased that the regulator agrees that for many customers auto-renewal is of value and can be an essential safety net for vulnerable customers if managed appropriately by the provider. Insurance brokers are typically closer to their customer than insurers and will be key to explaining how automatic renewal works and how customers can cancel the facility if it is not the right solution for them.

The FCA (Financial Conduct Authority) had indicated that a measure of success would be less switching because of fairer long-term renewal pricing. However, it is essential to remember that price is not the only consideration when buying insurance. Insurance brokers can advise on the level and breadth of cover suitable for customers. While there may be less switching, brokers will be reviewing the market for their customers at renewal to see if there may be a more suitable alternative to their existing policy.

Steve White, BIBA CEO said: "Our broker members always aim to offer their customers insurance that meets their needs both in terms of price and cover. Their long-held concerns about dual pricing will be addressed by the FCA's proposed measures and we look forward to working with the regulator constructively. The report is broad, alongside the ultimate aim of fairness it touches on addressing inequitable Most Favoured Nation clauses following the results of the Competition and Markets Authority enquiry and on firms using innovative solutions to compete.

Brokers are by their nature innovators they will continue to use their entrepreneurial approach to be the 'go-to' business for customers seeking fair and good value insurance."

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Read the FCA Report: https://www.fca.org.uk/publication/business-plans/business-plan-2020-21.pdf

Read BIBAs report on GPAPs: https://d10ou7l0uhgg4f.cloudfront.net/wp-content/uploads/2020/07/09150235/GPAPS-BIBA-report-2020_V3F.pdf