'Loyalty Penalty' Crackdown Could Hit Insurers

Law360, London (November 27, 2019, 6:24 PM GMT) -- U.K. home insurers could struggle to make a profit next year if the country's financial regulator cracks down on pricing practices, Fitch Ratings warned on Wednesday.

The ratings agency said if the Financial Conduct Authority moves to limit price increases at renewal for insurance customers, it could “potentially disrupt traditional insurers’ business models.”

The option is one of several currently being considered by the FCA as part of its “remedial action” into the so-called loyalty penalty employed by most of the insurance industry.

The FCA found in October that six million U.K. policyholders were being overcharged £1.2 billion by their insurers...

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