Insurance pricing

Sir. – Last year the UK’s financial regulator outlawed the insurance practices of below-cost discounting for first-time purchasers, and “price walking”, whereby loyal customers were systematically and progressively penalised for their loyalty.

These practices are particularly invidious as regards older and less financially-savvy customers whom the insurers knew were far less likely to “shop around”, or were less comfortable with researching websites for offers often seemingly designed to confuse rather than facilitate price comparison.

This week the Irish financial regulator, the Central Bank published its response to calls to stop these anti-consumer practices in Ireland. Predictably, it was a disappointment.

Instead of simply outlawing them as our next-door neighbour did, the Central Bank has still allowed insurers “load” a first renewal, and because its minimalist approach is to be “prospective” only, the insurers will be able to keep on banking the differentials already in place from the application of the impugned practice of “price walking”.

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Even more puzzling was the decision not to ban new-customer discounts for those who move insurer rather than renew. The pretext given for this was research by the bank allegedly showing “new customers valued these discounts”.

Perhaps that might be the case with regards to people who never had insurance (and for whom an exception could have been made), but it is nonsense for the vast majority who renew rather than move, and can hardly “value” a practice whose effect is to penalise them.

This isn’t the first time Irish financial consumers have been badly let down by the Central Bank. Perhaps it’s time the Government looked at giving the financial regulator’s consumer-protection function to a body with a bit more enthusiasm for the job. – Yours, etc,

PETER MURRAY,

Carrigaline,

Co Cork.