A Financial Conduct Authority (FCA) market study into general insurance pricing practices has been a considerable source of uncertainty hanging over AA (AA.). With an interim report concluding that UK home and motor policyholders are overpaying by around £1.2bn a year, news that the regulator is mulling intervention sent shares down by more than 4 per cent.
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To address competition issues, the FCA is considering cracking down on practices that discourage customers from switching providers and banning so-called ‘loyalty penalties’, whereby new customers are offered discounts while those renewing their policy see premiums go up. Following a consultation, the final report is due in early 2020.
