Good news for anyone buying insurance: you might soon be able to judge whether the policy you’re paying for offers good value for money.
Apparently, the Financial Conduct Authority is looking at whether it might force UK insurance firms to publish their average payouts and how many claims they actually accept. This follows a study in 2013 which showed that a lack of competition in the insurance market meant that many of us are over-paying for our insurance – by as much as £108 million a year.
It’s yet to be decided exactly how this ‘value for money’ would be judged: it could be the overall value of claims as a percentage of premiums paid, for example, or the frequency of claims accepted combined with average payouts. But whatever method is chosen, it’s all designed to increase competition and help customers choose the best policy for them.
It’s a complicated issue and so it’s not going to happen immediately, but it should spell good news for consumers. We’ll keep an eye on what happens and report back.