Insurance

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Sam White of Pukka Insurance has also been speaking to Radio 5 Live's Wake Up to Money about Brexit and the Queen's Speech.

As a car insurer, she said the biggest challenge was around car parts, which are imported from Europe.

"We’re looking at different ways to solve the problem... because of the lack of clarity, trying to build a business plan on the back of the information that’s coming out at the moment it’s virtually impossible".

And, she said, at a recent dinner with European insurers they "were completely gobsmacked by whole process. it's far to say they are really worried. I think the lack of clarity is causing a great deal of concern".

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Citizens Advice has announced that it is "happy" to hear that the Financial Conduct Authority (FCA) has responded to the complaint it submitted in 2018 about customers being affected by a "loyalty penalty" on their home insurance policies.

“It’s great to see the FCA acknowledging that the insurance market isn’t working for consumers and pledging to crack down on the loyalty penalty," said Citizens Advice's chief executive Gillian Guy.

“We’re especially happy to hear the regulator say that everything is on the table to make sure customers are getting a fair deal."

One case Citizens Advice highlighted was Paul from Staffordshire. His mother-in-law was being charged £800 a year for home and contents insurance on a small mid-terraced house.

“She is an 89-year-old lady and doesn’t have the capacity to sort all of that out herself. I feel like she’s been cheated. And I think it seems like common practice, to rip off the people who are most vulnerable," Paul told the charity.

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Here's an infographic based on data from the Competition and Markets Authority.

It shows the scale of how much money UK consumers are losing each year due to providers getting existing customers to pay more money if they decide to stick with a service once a deal ends, instead of switching to a new provider.

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The FCA has proposed a series of measures to address the problems it has identified with competition in the UK home and motor insurance market.

A consultation will be held on the remedies and a final report published in the first quarter of 2020.

These remedies include:

• Tackling high premiums for consumers - this could include banning or restricting practices like raising prices for consumers who renew year on year or requiring firms to automatically move consumers to cheaper equivalent deals.
• Stopping practices that could discourage switching - including restricting the way that firms use automatic renewal.
• Making firms be clear and transparent in their dealings with consumers - including improvements to the way firms communicate with their customers.
• Getting firms to publish information about price differentials between their customers.
• Harnessing the benefits of innovation in the longer-term, so that general insurance markets benefit positively from technological developments including Open Finance.

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The Financial Conduct Authority (FCA) has published a market study into the pricing of home and motor insurance, and it has concluded that around six million policyholders pay high prices and are not getting a good deal on their insurance.

The FCA found that:

• Insurers often sell policies at a discount to new customers and increase premiums when customers renew
• Longstanding customers pay more on average, but even some people who switch pay higher prices
• 1 in 3 consumers who paid high premiums showed at least one characteristic of vulnerability, such as having lower financial capability. For consumers who bought combined contents and building insurance, lower income consumers (below £30,000) pay higher margins than those with higher incomes.
• People who pay high premiums are less likely to understand insurance or the impact that renewing has on their premium
• Most firms, when setting a price, include their expectations of whether a customer will switch or pay an increased price. This is not made clear to the customer.
• Firms engage in a range of practices to raise barriers to switching.
• Many consumers who switch or negotiate their premium can get a good deal.

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The Lloyd's of London insurance market has reported a profit before tax for the first half of the year of £2.3bn, up from £600m a year earlier.

John Neal, Lloyd's chief executive, said: "It is encouraging that the Lloyd's market is showing increased discipline in 2019 as evidenced by a reduction in gross written premiums and an improvement in the attritional loss ratio for the current underwriting year.

However, we recognise the importance of continued focus on performance management to maintain this momentum throughout the rest of 2019 and beyond."