Increase in customers shopping around after FCA transparency rules

The number of home and car insurance customers shopping around for a better price rose by 1.4m in the year new FCA transparency rules were introduced.

The figures from Consumer Intelligence show customers saved an average of £100 by shopping around, exactly one year on from the introduction of the rules encouraging customers to shop around and clearly display what they paid last year compared to their new quote.

The data shows since April 2017, 300,000 more drivers compared motor insurance, a 1% rise from 84.1% to 85.1% of customers, and 1.1m more home insurance customers compared prices – a 3% rise from 74.6% to 77.6%.

The data research company stressed that pricing pressure across the insurance market had made it tougher for insurers since the new rules were introduced. Around 85% of motor customers questioned were quoted higher prices and 61% of home customers saw premiums increase.

William Davis, insurance analyst at Consumer Intelligence said: “Consumers are better informed than ever and the FCA has made it clear that it is keeping a close eye on whether firms are adequately displaying the previous year’s premium at renewal.

“The regulator hoped that drawing consumers’ attention to what happens to their premiums at renewal would promote competition and ultimately help to wean insurance brands off dual pricing, whereby new customers get the best prices and loyal customers pay more.

“If its warnings continue to prompt increased shopping, the dual pricing problem might just follow slowly behind.”

Research shows the average savings for switching insurers after a year are £64 for motorists and £34 for households.

But the data highlights how loyalty costs customers, the longer they stay with a provider. Car insurance customers who’ve been with the same insurer for eight years can save nearly £131 by switching while households will save around £119 by moving after seven years.

The table below shows the average savings for car and home insurance customers depending on how long they’ve been with their provider.