FCA announces ban on insurance price walking

UK's financial watchdog has announced that from January 1, 2022, onwards, insurance firms will no longer quote customers a higher price for renewing their home or motor insurance than they would pay if they were a new customer. The Financial Conduct Authority (FCA) believes this will save consumers £4.2bn ($5.6bn) over the next ten years.
Executive director, consumers and competition at the FCA, Sheldon Mills, said, "Our interventions will make the insurance market fairer and make it work better. Insurers can no longer penalise consumers who stay with them." He said consumers can still shop around and negotiate a better deal, however, they won't have to switch to avoid being charged a loyalty premium.
The new rules come after the FCA found that many insurers were increasing prices for renewing customers yearly. The practice is known as "price walking". It not only means higher prices for loyal customers, according to the FCA distorts the way the insurance market works. Finance analysts believe the new regulation is good news for those who like to stick with one provider.
FCA said firms unable to implement the technical changes required to comply with the new rules before January 17 will need to ensure consumers do not lose. The new set of rules also includes rules to give consumers more accessible methods of cancelling their policy's automatic renewal and require insurance firms to demonstrate that their products deliver fair value to customers.