Mr. Brian Mahon:

From 2015 to 2018, the vast majority, if not all, of our renewal customers received a lower price than the new business price. While the FCA has a number of issues with the practice, and its interim report is being released tomorrow morning, it stated in its initial review that differential pricing is not inherently unfair, harmful or always results in poor customer outcomes. Differential pricing encourages new business competition within the market. We are here to talk about cost and availability of insurance. Adjusting differential pricing will have no impact on the cost of insurance. It will, instead, harmonise it. Costs will be increased for new business customers, of which there are roughly 500,000 in the Irish market each year. It will also marginally reduce costs for renewal customers, but the average cost will remain exactly the same. I argue that because competition will be reduced on the new business side, availability may be reduced.

We would welcome a review of this issue. Our sister company in the UK has led the market there with Aviva Plus. Interestingly, this initiative, which has been in operation for 12 months, involves making a commitment to customers who take out the company's product that their renewal price will be no more than the new business price. Despite that product being available, the company sells more on its standard product with a lower price point than it does on the Aviva Plus point. Customers, therefore, are choosing not to go down the route of level pricing. They still want to go for the cheapest price in the majority of cases. When our UK colleagues test a product that may well work within the Irish market, we will look at bringing in something similar. We are working closely with our underwriting colleagues in the UK and reviewing with interest their offering.