Not upheld: unfair insurance pricing and premium increase complaint against esure Insurance Limited

Decision detail

Summary

Mr M complained about a significant 30% increase in his car insurance renewal premium with esure. He was unhappy that the ombudsman could not share esure's commercially sensitive underwriting information with him and felt the premium increase was unjustified. The ombudsman explained that insurance pricing is a commercial decision for insurers and that different insurers apply different risk strategies, which explains premium variations. After reviewing esure's underwriting information, the ombudsman found the premium was fairly calculated based on factors including industry-wide claims cost increases and various risk rating factors. The complaint was not upheld as the ombudsman was satisfied esure had treated Mr M fairly.

The Ombudsman's reasoning

The ombudsman explained that the FOS role in insurance pricing complaints is not to determine what an insurer should charge, as this is a commercial judgment. Insurers' pricing information is commercially sensitive and cannot be shared with customers, but can be reviewed by the ombudsman to check fair treatment. The ombudsman found that esure's premium calculation was fair based on its underwriting information. Different insurers apply different risk strategies and rating factors, which explains premium variations without indicating error. The ombudsman noted that while the 30% increase was significant, it reflected esure's risk appetite and approach to various rating factors including claims history and vehicle type. Without evidence of the alternative lower quote Mr M claimed to have obtained, the ombudsman could not investigate that concern.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website