FCA’s Brewis warns MPs premium finance action could have ‘waterbed effect’ for consumers

The Financial Conduct Authority’s insurance director Matt Brewis has raised the concern that taking action on premium finance would have little or no impact on the price of motor cover.

Speaking to the Finance Treasury Committee yesterday, he described premium finance as an “essential product” for people who cannot pay in one lump sum.

Brewis noted that 51–52% of motor insurance policyholders pay monthly, whilst that increases to 60% for household insurance, adding: “My concern is around the credit risk that is charged, there is very limited credit risk when it comes to these products. If you cannot pay for your insurance it can be cancelled. So the cost of it is being used to

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