Insurance Industry: Travel Premiums

Lord Tunnicliffe Excerpts

Tuesday 28th June 2022 Lords Chamber

[Baroness Penn (Con)]

As I just pointed to, a quite significant reform was put in place in January this year regarding general insurance pricing practices. These measures are intended to improve the way that insurance markets function and reduce harm for consumers affected by price walking. We want to see how those reforms operate and bed in over time, but I gave a commitment to the noble Lord, Lord Sharkey, to communicate with the FCA about its assessment of the market in relation to age. I will get back to noble Lords.

[Lord Tunnicliffe (Lab)]

My Lords, in life and in politics there is always a trade-off between intensity of gaze and breadth of vision. I sense an intensity of gaze from those of the average age in this Chamber, who would like to see some rule by which people of the Minister’s age could subsidise us old fogies. I understand that the law does not say that, unfortunately, but there are two areas on which I would like an answer. First, in order to be effective, the new rules must have very positive promulgation, but I do not sense that they have it. Every citizen seeking this should know about them. Secondly, when the algorithm has just turned you down, it is a pretty frightening situation—especially when your wife has just spent £7,000 on a holiday trip—and at that point you feel very vulnerable. Could the Minister go further on what mechanisms exist, and which ones should exist, to ensure that this marketplace is fairly pricing this important minority of customers?

[Baroness Penn (Con)]

My Lords, I believe that the way the signposting agreement is designed ensures that, when a consumer is turned down for insurance or is charged a significantly higher premium for the medical element of it, the obligation is to directly signpost them to alternative provision or a register of specialist providers, so that every consumer who finds themselves in that position is given an alternative pathway to find insurance. There is a wider question about general knowledge of alternative provision beyond that sign- posting, and I will happily take that up with the FCA as well as in government.