Pricing practices in the retail general insurance sector: Household insurance

The FCA identified the following issues relating to firms’ current pricing practices:

• Firms failing to have appropriate and effective strategies, governance, control and oversight of their pricing practices and activities, such that they are unable to reliably assess and evidence whether they are treating their customers fairly.
• Differential pricing leading to some identifiable groups of consumers paying significantly higher prices than other identifiable groups of consumers with similar risk and cost to serve characteristics.
• The risk of discriminating against consumers through using rating factors in pricing based (directly or indirectly) on data (including third party data) relating to or derived from protected characteristics.

This report sets out the key findings of our thematic work on the pricing practices of household insurance firms. It then details our expectations of firms and our next steps.