Your prices are so low. Is it genuine?

We probably get about 20 phone calls a day asking this very question. We then go on to explain why.

There is no doubt that we could charge more for many of our products. We would probably sell the same volume and as a company we would earn more money. So you are probably thinking why would you not do that? The main reason is FCA Thematic Review TR19/2  . In April 2019 the Financial Conduct Authority (FCA) issued their findings regarding the type of insurance products, like the products we sell on our website. They weren't particularly questioning the value of the products in themselves, but were looking at how they were sold and the distribution chain. 

What they found was that the products were often getting overpriced because there were too many people in the sales chain and often being sold by people who primarily were selling something else and adding on insurance products as an extra.

A good example of this would be Car dealerships selling cars, but then adding on GAP, Scratch & Dent, Tyre Insurance etc... There are a few things wrong with this. Firstly they aren't the Insurance broker, so adding an extra layer into the sales chain and consequently increasing the premium. Secondly Insurance is not their expertise.

Going back to the FCA Thematic Review TR19/2 . The main thing we took from the review were the following comments

• Customers may pay substantially more for a product which delivers no additional benefits compared to alternative, less expensive products available in the market. This could occur when a firm distributes the product to customers outside the target market or due to conflicts of interest in a firm’s remuneration structure incentivising it to sell a particular product.
• Remuneration structures may lead to customers paying increased prices as a result of remuneration that is paid to firms in the distribution chain who incur little cost or deliver little benefit to customers.

So they weren't saying that there was anything wrong with the products, but that in certain instances, the products are being sold at prices that don't reflect the inherent value in the product.

This is why we continue to sell our products at the prices we do. We don't believe we are too cheap. We believe that we are selling our products at the right price and earning the right level of commission.

We are trying to do things right and hope that in time, everyone else will need to adopt our attitude, or stop selling.

• We don't charge broker fees at New Business, Renewal or Mid Term Adjustment
• We don't auto renew
• We earn the right level of commission (in our opinion) on the policies we sell

Anyway, if you want to learn more about the FCA Thematic Review TR19/2 , then the whole review is available here . and let's hope that within the next few years, their findings start to be implemented.

On a final note. Hopefully now you begin to understand, that it's not that we are too cheap, but everyone else is just more expensive!

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