Committee publication · Correspondence · 14 July 2026
Correspondence from Fairer Finance to Chair on consumer finance follow-up, dated 6 July 2026
From: Treasury Committee
Inquiry: Consumer finance
Summary
James Daley of Fairer Finance responds to three written questions from the Treasury Committee chair following his 24 June evidence session. He details consumer harms in insurance markets (complexity, poor claims information, unfair pricing), critiques the FCA's shift away from consumer protection toward growth prioritisation, and argues for minimum standards in certain insurance products to protect vulnerable consumers.
Key findings
- Three main consumer harms in insurance: policy complexity causing misunderstanding, lack of reliable claims-satisfaction data, and hyper-personalised pricing that disproportionately affects low-income and high-risk groups ('poverty premium').
- FCA's enforcement intensity diminished in 2024–25 after Treasury redirected it toward growth objectives and political pressure led to abandonment of 'name and shame' policy; market studies concluded without major remedies.
- AI-embedded pricing algorithms are intensifying risk-based discrimination; debate needed on where pricing boundaries should sit, analogous to NHS pooled-risk model.
- Loss adjusters often incentivised to side with insurers rather than act as independent arbiters; independent claims-satisfaction polling recommended over simple claims-payment percentages.
- Case for minimum standards in certain policies (e.g. travel insurance repatriation cover, standardised claims interpretation) to protect consumers unable to evaluate complex exclusions, without hampering competition.
Tone
CriticalTopics
consumer-protectioninsurance-regulationpricing-fairnessfinancial-inclusionartificial-intelligence
Key actors
James Daley, Fairer Finance, Dame Meg Hillier, Treasury Committee, FCA, Which?, ABI, Financial Inclusion Committee
Notable line
“As a society, we hold the NHS in high regard – a system that pools risk completely – charging people a premium based on their income, which is unaltered by their lifestyle or other risk factors.”
Key Quotes
“Insurers are moving further away from the principles of pooled risk – attempting to use a myriad of data points to price risk individually.”
“This change in emphasis was what prompted Which? to launch its super-complaint.”
“The FCA says it won't look at insurance pricing or do the broader analysis about what the cost would be of forcing insurers to accept interest-free monthly payments, as these are social issues, and require direction from Parliament.”
“We want to create the conditions for healthier competition – which leads to firms competing on product quality and better claims outcomes, rather than exploiting the lack of consumer capability.”
Source · parliament.uk record ↗