Time for transparency

< 1 minute read  |  February 6, 2017

Following a consultation which began in December 2015 and ended in March 2016, the Financial Conduct Authority (FCA) has set April 1, 2017 as the implementation date for the general insurance markets.

New year, new rules

Under the new rules due to come into force in April, insurance companies and intermediaries will need to provide details of the previous year’s premium at each renewal and actively encourage consumers to shop around to find the right cover for the best price.

Straight Outta LASPO

The opening of the 1988 track Straight Outta Compton from NWA warns:

“You are now about to witness the strength of street knowledge”

While they were dealing with a different time and prejudice, NWA’s lyric couldn’t be more apt. As customers become savvier and aware of their consumer rights there is undoubtedly an increase in the number of customers shopping around to find the best deal.

In 2012, following the implementation of LASPO, insurance companies promised to pass on any savings to loyal customers. In reality, we have witnessed a steady increase in premiums ever since, with no explanation as to where the promised savings went.

Rose tinted premiums

While no one is under any illusion that the new rules will stop motor premiums from increasing, it does signal a new era for the industry.

With the power of choice back in the hands of the consumer, insurance companies will need to continually offer their best price and cover if they are to compete. Those insurers who don’t will lose ground to forward thinking companies, before ultimately becoming another casualty.

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