James Daley's response to FCA response to Which? super-complaint

James Daley, managing director of consumer group Fairer Finance, reacts to the FCA’s response to the Which? (insurance) super-complaint. He said: 

"We’re pleased to see that the FCA acknowledge the ongoing problems in the general insurance market. However, their response is unlikely to be sufficient to get to grips with the many and growing problems in this sector. The insurance market is caught in a race to the bottom on price - leading to the hollowing out of products, as well as poorer claims experiences. The solution to this has to start with ensuring that comparison sites give consumers the right information to help them understand what they are buying, and not buying. That needs to include reliable data about which firms are treating customers fairly at claims stage. We also need to look at some minimum standards in areas where hollowing out has gone too far. "

"The FCA has at least committed to continuing work streams looking at consumer understanding in this market - including a more detailed look at the link between the sales process and poor claims experience. It’s vital that this strand of work acknowledges and addresses the broader problems caused by hollowing out.

"More broadly, there are also growing issues around how insurance is priced - and the growing poverty premium for those on low incomes. The government side stepped looking at this issue in its recent Financial Inclusion work, as well in the work done by the Motor Insurance Taskforce. It’s vital that the FCA picks up this important issue - so that at the very least we have some more transparency around pricing and consider how to address some of the poorest outcomes that today’s complex pricing strategies are driving."

Please see here a link to Fairer Finance's Insurance Pricing Report from earlier this year - Insurance industry data-driven pricing model faces public backlash | Fairer Finance