Tease release me

22 September 2020 By Aimee Donnellan Follow @aimeedonnellan

Direct Line and RSA shares fell after Britain’s Financial Conduct Authority proposed that existing customers shouldn’t pay higher rates than new ones. Spiking Covid-19 claims are hitting the sector too. But with the FCA pain evenly shared, the move may actually help margins.

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Britain’s Financial Conduct Authority said on Sept. 22 it proposed to stop insurers from charging more to pre-existing car and home insurance customers than to new clients.

When a customer renews their home or motor insurance policy, they would be paying no more than they would if they were new to their provider through the same sales channel, such as online, the FCA said.

The FCA estimates that its proposals will save consumers 3.7 billion pounds ($4.73 billion) over 10 years.

It identified 6 million policyholders paying high or very high margins in 2018, who could have saved 1.2 billion pounds.

Shares in British insurers RSA, Hiscox and Direct Line were down 2.4%, 3.9% and 5.2% respectively by 0733 GMT on Sept. 22.

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