Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Britain proposes insurance shake-up after Grenfell Tower fire

by Wanda Rich
0 comments
2022 09 21T143649Z 2 LYNXMPEI8K0IA RTROPTP 4 BRITAIN FIRE

By Huw Jones

LONDON (Reuters) – Britain’s financial watchdog has proposed reforming how apartment blocks are insured after the deaths of 72 people in the Grenfell Tower fire in London led to rocketing premiums on policies.

The Financial Conduct Authority said on Wednesday that since the Grenfell fire in 2017, leaseholders in residential blocks have faced big hikes in building insurance as some insurers pull out, leaving competition “not working effectively”.

Remaining insurers have limited commercial incentive to supply insurance or cut prices, the FCA said.

Average premiums doubled to 15,300 pounds ($17,347) between 2016 and 2021, with bigger increases for buildings with flammable cladding and high broker commissions.

“Brokers, freeholders and property managing agents were unable to quantitatively demonstrate how the increased cost of their commission was providing additional value to their customers,” the FCA said.

The watchdog’s draft measures include creating a cross industry insurance pool to limit the risk to individual insurers posed by buildings which still have flammable cladding or other material fire safety risks.

The FCA proposed making leaseholders ‘customers’ of building insurers, a step which would bring policies under tough new consumer protection rules being rolled out to end rip-offs in retail financial products.

“This could make it clearer for firms how they would have to consider the needs of leaseholders ‑ including for fairly priced buildings insurance,” the FCA said, adding an update on progress towards potential remedies would be provided in six months.

The Association of British Insurers said it was acutely aware of challenges for leaseholders affected by the building cladding and fire safety crisis.

“We support the FCA’s recommendations on a risk sharing scheme and have been actively discussing various options with industry and Government,” said James Dalton, the ABI’s director of general insurance policy.

($1 = 0.8820 pounds)

 

(Reporting by Huw Jones; Editing by Emelia Sithole-Matarise)