Biba urges insurers to address differential pricing in fair value warning

Broker trade body Biba has urged insurers to ensure that products sold via brokers represent fair value.

In its 2025 manifesto, entitled Partnering to Deliver Value, Biba identified a number of  issues for the industry, including differential pricing.

In a pre-launch briefing with Insurance Times, Biba’s chief executive Graeme Trudgill explained the importance of addressing differential pricing – a “new and very important” issue highlighted in the association’s annual document.

Trudgill illustrated the disparity with an example, saying: “A broker handling a £30,000 motor fleet renewal presents it to the client, only for the client to say they’ve spoken directly to the insurer and were offered the same for £10,000. 

“How is that fair value? It is not.”

The manifesto emphasises that fair value is a fundamental principle guiding the products and services brokers provide to clients.

It added: “It is important for a broker to evidence that the advice and services that encompass the insurance purchase represent value for money.

“It is also vital that insurers ensure fair value and consistency in the provision and pricing of their products through each of their distribution channels, reflecting the costs of each and differences in the extent of policy cover offered.”

Trudgill explained: ”There are reasons why there might be a different price. We’re not saying it should be the same price.

“We understand there’s a cost of a broker agency, there’s a cost of commission, but on the other hand, brokers save insurers a lot of work and money through the admin they handle, the marketing they do and the extensive networks they provide for insurers.”

New issues 

Alongside differential pricing, the manifesto highlights several new issues for the first time, including permitted insurance payments under the Leasehold and Freehold Reform Act, participation in the Motor Insurance Taskforce and premium finance.

Meanwhile, included in the manifesto is a new six-point plan to achieve a more proportionate regulatory environment.

This plan calls for the removal of unnecessary FCA rules now Consumer Duty is in place, reform of the product value/fair value assessment requirements, reducing the scope of the Consumer Duty by removing larger commercial clients, streamlining reporting requirements, speeding up authorisations and the need for international comparison metrics for the regulator.

Trudgill said that partnerships both within and outside of the industry were ”key to this year’s manifesto in helping us achieve improved outcomes on the issues raised for everyone”.