● Authority will look at market● More rises expected this year
Chris Rosamond Chris_rosamond@autovia.co.uk
THE Financial Conduct Authority (FCA) will make a new assessment of the state of the car insurance market this year, following calls in Parliament and elsewhere for a response to spiralling prices.
The promised insurance review won’t be a full market inquiry, which the FCA last carried out on the sector in 2019, but we’ve been told the assessment will include a full evaluation of the impact of new pricing rules introduced in 2021, and will look into concerns about insurance add-ons and extra costs.
“We are acutely aware of the growing concern about the cost of purchasing motor insurance,” the regulator says. “While we do not set or control prices, we are monitoring the motor-insurance market to ensure customers are receiving fair value.”
Recent calls for action include a letter written by Carla Lockhart MP to HM Treasury, “suggesting that the Government, in their engagement with the FCA, press for closer industry scrutiny”. Lockhart also reflected the views of many drivers in a parliamentary debate, stating her constituents are up in arms at “exorbitant costs”.
Auto Express’s own investigation into rising premiums revealed that drivers across the board are facing increases partly because new technology has ‘broken’ the traditional underwriting model. For example, insurers who are unable to accurately assess risk when it comes to EV battery repairs and replacement, due to a lack of existing data, are pushing up premiums across the board instead of targeting those specific models where costs may be unknown.
While spreading risk across the market has always been a factor, as the gap widens between the cost of repairs of an avera
