Friday, 21 December 2012
The Financial Services Authority is carrying out a study into add-on insurance products which are sold with cars and other high value products.
The study will look at whether there features of the add-on markets that weaken competition and drive poor consumer outcomes.
The FSA said it will take “full account” of firms’ and consumers’ behaviour, and how they interact to shape prices and the quality and delivery of the product.
“We aim to complete the assessment by the third quarter of 2013, and to publish the results shortly after that,” it said
Karen Wagstaffe, training and compliance director with Finance Cover & Training, said that while the FSA has not revealed exactly what it meant by add on products, it was “highly likely” to include GAP Insurance, Key Insurance, Tyre Insurance and Alloy Insurance as part of the research.
Wagstaffe said the FSA may look into:
- How much level of profit a firm gets from add-ons
- How add-ons might harm customers
- The state of competition in the market
- How customers buying add-ons behave, and how firms behave when selling add-ons
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