The Financial Conduct Authority (FCA) has announced a review of insurance add-ons that include warranties on electrical goods, mobile phone insurance and boiler cover. The review will look at whether there is lack of choice and competition in a market valued at £4bn.
What are insurance add-ons?
A wide range of insurance products are sold alongside or on the back of primary products. Theses primary products could be for example motor vehicles, mobile phones or air flights.
Why is the review of add-ons being conducted?
It is felt that as these products are primarily offered at the point of purchasing a primary product this may limit how far the customer investigates the product offered.
What products are covered in the add-on review?
The FCA is looking at GAP insurance, home emergency cover, gadget insurance, travel insurance as well as personal accident and accident cash plans.
What is being investigated under the add-on review?
The FCA review will assess whether competition is effective in these markets and whether customers are made aware that they can shop around for a more competitive product. It will also look at whether there are any unnecessary barriers preventing new firms entering the market or existing firms expanding.
How will the add-on review be conducted?
The FCA is requesting information and evidence from firms currently providing add-on products together with customer experiences and complaints.