Consumer group Which? has called on the Financial Conduct Authority (FCA) to investigate whether insurers are meeting regulatory requirements on fair value, after research suggested many policyholders are only offered lower renewal premiums if they challenge the initial quote, according to a report from The Guardian.
In a survey of over 2,000 adults with car insurance, Which? found that 60% of respondents had contacted their insurer about the renewal price, mostly by phone. In the majority of those cases (61%), the insurer revised the premium downward. The average reduction was £64, with some customers reporting savings of more than £200.
According to the report, the findings have raised questions over whether firms are complying with the FCA’s Consumer Duty rules, which came into effect in July 2023 and require financial services providers to offer fair value and act in the best interests of their customers.
Which? said that offering significantly lower prices only after customers initiate a discussion could indicate that some insurers are not applying the rules consistently. It also cited recent media reports highlighting large premium increases at renewal, including one case where a home insurance quote rose from £440 to £4,730, and another that jumped from £518 to £1,353.
The survey also showed that 40% of respondents accepted their renewal quote without contacting their insurer. Which? said this may suggest a number of customers are renewing at higher prices than necessary, the report said.
The organisation published guidance to help consumers negotiate their insurance renewals, advising policyholders to question price increases, compare market rates, and signal a willingness to switch providers if better terms are not offered. It also suggested asking for additional cover, such as breakdown assistance, where discounts are limited.
The Association of British Insurers (ABI) responded by stating that price changes between initial and revised quotes may reflect updated or clarified information, including vehicle security features, driving behaviour, coverage level, or excess options.
“ABI members take their responsibilities to customers and their regulatory obligations seriously,” the trade body said.
Which? has urged the FCA to review whether insurers’ renewal practices align with the principles of the consumer duty and provide fair value across all customer interactions.
