The United Kingdom's Financial Conduct Authority (FCA) announced on Wednesday that it is launching a market study of the domestic premium finance market, which allows clients to pay for vehicle or home insurance in installments. The FCA said it is concerned premium finance companies are not "providing fair value," considering the average yearly rate on the amount of money borrowed range between 20 to 30%. The watchdog also found that 79% of adults in financial difficulty have used premium finance.
The FCA said the review will examine "whether the products represent fair value, how well customers are made aware of their financing options, the role of commission, and other potential barriers to effective competition in the motor and home premium finance market." An interim report is expected in the first half of 2025.
