ByElena VardonFollowOct. 16, 2024 4:04 am ET
Shares in U.K. motor insurers Admiral Group and Direct Line both fell over 3%. Photo: Matthew Lloyd/Bloomberg News
The U.K.’s Financial Conduct Authority will begin a review of a segment of the country’s motor and home insurance market to check that customers are getting fair deals as prices rise.
The regulator on Wednesday said that it is concerned that this part of the market that allows people to pay for insurance in installments, also called premium finance, might not be providing fair value to more than 20 million customers.
“We want to ensure that competition works well and make it easier for consumers to find the best deals,” the FCA’s director of competition, Graeme Reynolds, said. A report on the study and proposed next steps are expected to be published during the first half of 2025.
The study is being launched alongside a U.K. government’s task force on motor insurance to identify measures to stabilize or reduce motor insurance premiums. The FCA will participate in it, including by reviewing claim costs and analyzing the impact of rising prices on different customer groups, it said.
Shares in U.K. motor insurers Admiral Group ADM -2.92%decrease; red down pointing triangle and Direct Line both fell over 3% shortly after market open while Sabre Insurance gained 0.6%.
Any measures to bring down the cost of motor insurance are more likely to target the causes of rising prices rather than lowering prices directly which could eat into insurer’s margins, Jefferies analysts said in a note to clients.
Write to Elena Vardon at elena.vardon@wsj.com
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