The Financial Conduct Authority (FCA) has published its annual Sector Views, an assessment of the risks and potential harm to consumers across financial services markets.
The assessment revealed that pricing practices in insurance “still penalise loyal customers”, and the ‘loyalty penalty’ in home and motor insurance cost 6 million “longstanding” consumers an extra £1.2bn in 2018.
The FCA said it is “finalising remedies” for this following its market study.
The Sector Views report looks at the impact of macroeconomic developments and common drivers of change emerging across financial markets. It also outlines areas where there may be a negative impact on consumers or the “integrity” of the financial system in that sector.
Christopher Woolard, executive director of strategy and competition at the FCA and interim chief executive designate, said: “We are committed to reducing harm in the markets we regulate. Our analysis of markets ensures that we do this effectively, helping us to decide where to focus our attention.
“We expect firms to be similarly focused on preventing harm and assisting us where they can, and we will continue to actively supervise all firms to ensure they achieve this.”
He added: “What is clearly apparent from the Sector Views, is that many of the harms we are seeing are created by a significant number of smaller firms we regulate or firms beyond our remit.
“The findings in the report will contribute to our upcoming Business Plan and the decisions we make affecting consumers, market integrity and competition.’”