The UK financial watchdog is putting in place a series of measures to push insurers to treat their customers fairly during the pandemic.
From next Monday, insurance firms are being asked by the Financial Conduct Authority to “consider what options they can provide to customers” and then offer a payment holiday of one to three months if amendments to the insurance cover do not help alleviate the payment difficulties for customers paying their premium in instalments.
The FCA said it expects firms to grant customers a payment deferral unless it is obviously not in the customer’s interests to do so.
Suggested amendments to insurance cover included reassessing the customer’s risk profile, which could see materially lower premiums because of coronavirus; checking if there are other insurance products the customer could be offered that might better meet their needs, such as motor insurance customer might no longer need associated add-ons or could be moved from fully comprehensive cover to third party fire and theft.
It was also suggested that cancellation and other fees could be waived.
“The measures confirmed today will provide urgent support to those that need it,” said the FCA’s Sheldon Mills, interim executive director of strategy and competition.
He added: “As with other areas of finance, we have worked quickly to draw up measures to help policyholders in financial difficulty because of coronavirus. The majority of respondents expressed support for the proposals we published at the start of May.
“Many firms in the insurance industry have already taken some of the actions we are suggesting here to support customers, such as premium reductions, discounts, waiving fees, and payment deferrals.”
Shares in insurers were mostly lower on Thursday, with Direct Line Insurance Group PLC (LON:DLG) and Hastings Group Hldg PLC (LON:HSTG) down more than 3%, Admiral Group PLC (LON:ADM), Hiscox Ltd (LON:HSX) and Beazley PLC (LON:BEZ) down around 5%.