It isn't always easy to know which insurance company to go with, but a new pilot scheme is set to help consumers make a more informed decision.
The Financial Conduct Authority (FCA) is to pilot general insurance ‘scorecards’, which will help people compare both firms and the products they offer.
Consumers will be able to see how often claims are made on particular products, how likely they are to be accepted and what the average payout is.
The information will be published on the FCA website in an “easily accessible format” and during the pilot will only cover a small number of products.
The results of the pilot, which will be launched this summer, will be used to inform any consultation on the extended use of scorecards.
It is expected to last about 12 months and will include two publications of the data – one at the start and one at the end of the pilot.
Christopher Woolard, director of strategy and competition at the FCA, said: “We believe that publishing a range of information will help to boost competition between firms, encouraging them to focus on improving the value and performance of their products, whilst giving stakeholders and consumers more insight into the value they offer.”
In July 2014, the FCA’s study of the general insurance add-ons market showed competition was not working well for many consumers.
Last year, the regulator proposed a number of options for publishing product information, including the scorecard option.
The Association of British Insurers (ABI) said it already publishes industry-wide success rates for key general insurance products.
James Dalton, ABI’s director of general insurance policy, said the measures proposed by the FCA are similar to those recommended by the ABI.
“We will examine this proposal in detail and work with the FCA going forward,” said Mr Dalton.
“In doing so we must ensure the high level of competition in the market continues, and that publishing this firm specific data does not risk misleading consumers with irrelevant information.
“It’s important that buying insurance is not just about getting the cheapest price in the quickest time possible, but about ensuring people have the right product for their circumstances.”