Price walking

Price walking is a form of price discrimination whereby existing customers, especially long-standing customers, incur a loyalty penalty over new customers. The pricing strategy is common in the insurance industry.

It is used to entice new customers with artificially low rates, and then exploits existing customers to subsidize the prices offered to new clients. [1]

UK

In the UK, the Financial Conduct Authority (FCA) has banned the practice effective 2021. [2][3][4] The FCA described the practice as a systemic scam and stated "Insurers will be required to offer renewing customers a price that is no higher than they would pay as a new customer."[5][6]

References
  1. Gangcuangco, Terry (June 1, 2021). "Insurance industry stakeholders react to price walking ban". www.insurancebusinessmag.com. Retrieved 25 December 2021.
  2. Scott, Katie (28 May 2021). "FCA publishes policy statement confirming price walking remedies". Insurance Times.
  3. Hasler, Nicky (23 June 2021). "FCA's New Rules Against General Insurance 'Price Walking'". ICSR.
  4. Ruzicka, Angelique (25 September 2020). "What is the ban on price walking all about?". RiskHeads Insurance Magazine.
  5. Peachey, Kevin (28 May 2021). "Insurers must not penalize loyal customers, says FCA". BBC News.
  6. Ellson, Andrew (May 28, 2021). "Financial Conduct Authority stops home and car insurers penalizing loyal customers".
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