Fair pricing in financial services


Insurance brokers seek to treat customers fairly at renewal, by using their knowledge of the market, to shop around for them. It is not uncommon for the broker to consider the breadth of cover under a policy and the claims-paying history (likelihood) of the prospective insurer providing the policy before determining that it may not be in the client’s best interest to recommend a switch to a cheaper policy at renewal. We are concerned about the possibility that the FCA may ban the practice of ‘auto-renewing’ insurance policies and instigate ‘auto-switching’. 

BIBA suggests that it would be more beneficial to make auto-renewal an explicit opt-in when the policy is first sold, which is in line with the approach required for optional additional insurances. 


Banning auto-renewal could create significant harm for those customers who rely on it by leaving them without insurance protection.

BIBA believes that auto-switching is not a remedy and could be detrimental if customers are simply switched to a theoretically ‘equivalent’ lower priced product that does not in fact provide the same level of cover.

The FCA’s conduct rules which govern firms’ behaviour, in particular the requirement to assess the demands and needs of the customer (ICOBS 5.2.2R) appears to be inconsistent with mandating switching, especially if the renewal switch is made without a reassessment of needs.

There is also a concern around auto-switching pet or annual travel insurance which provide cover for pre-existing medical conditions which may subsequently be excluded from the newly arranged cover. 


For the FCA to make auto-renewal an opt-in requirement and to not allow auto-switching of general insurance products.


To promote the BIBA and ABI Guiding Principles and Action Points on General Insurance Pricing.

BIBA has more than 1,800 individually FCA regulated firms registered as members. 

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