The Financial Conduct Authority has written to a number of motor insurers and brokers asking them to explain the pricing of premium finance — the instalment plans that let drivers spread the cost of cover across the year. Monthly payers, who are disproportionately younger and lower-income, typically pay materially more in total than those who pay upfront.
In a market where the FCA’s 2021 general insurance pricing practices remedy already reshaped how renewals are priced, the regulator appears to be turning its attention to the add-on cost of credit. Insurers have been asked to set out, by a set deadline, how they assess fairness under the Consumer Duty.
Insurance In Focus will be tracking the responses and any subsequent guidance. This article is a stand-in sample pending full editorial coverage.