While dual pricing is a problem in our industry and there is no doubt that some organisations behave disgracefully, perhaps the FCA should look at the root cause of the problem.
As the vast majority of the market is driven by price, via comparison sites, bad behaviours begin to emerge. For insurers to get ranked into the first 5 slots (nobody cares after that!) on a comparators list, they have to remove virtually all of the cover and base it on "new customer only" pricing.
The insurer loses money in year one and attempts to recoup in the following years, so the price goes up.
The UK motor insurance industry has lost money for most of the last 20 years as a result.
How is this in the best interests of the client?
So, good for the FCA - fix the Symptom but also address the Underlying Cause!
The financial watchdog has vowed to tackle the problem of dual pricing in the coming year. The Financial Conduct Authority said it would look at the issue of why existing customers are often charged more than new customers. The system of dual pricing is widespread and has been described by consumer groups as “broken”. “If competition is working well in a market, it should not overly disadvantage existing customers over new customers,” said the FCA in its report.