Central Bank proposes to end the loyalty penalty for private car and home insurance customers
Executive Summary
The Central Bank of Ireland (CBI) proposes banning "price walking" in private car and home insurance to eliminate the loyalty penalty, where long-term customers pay significantly higher premiums (14% more for car, 32% more for home after 9 years) than new customers with similar risk profiles. This stems from a 2021 review finding differential pricing unfair to loyal or less mobile consumers, with regulations finalized and effective from 1 July 2022, confirmed effective in subsequent reviews. It matters as it enforces fair treatment under CBI's consumer protection mandate, requiring insurers to overhaul pricing models while preserving new customer discounts to maintain competition. #
What Changed
- Ban on price walking: Insurers cannot charge second or subsequent renewal customers a higher premium than an equivalent year-one renewal customer with similar risk and service cost. - Disclosure of new business discounts: Firms must clearly disclose to new customers that lower prices include a new business discount. - Annual pricing policy reviews: Providers must review pricing policies yearly to ensure focus on customer impact, adherence to rules, and fair treatment. - Automatic renewals requirements: Introduce consumer consent for automatic renewals and enhanced information/reminders to support informed decisions and switching. These were implemented via the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Insurance Requirements) Regulations 2022. #
What You Need To Do
- Pricing model adjustments
- Disclosure updates
- Governance and reviews
- Renewal processes
- Monitoring and reporting
Key Dates
Compliance Impact
Urgency: low (as of 2026). Rules have been effective since July 2022, with CBI's 2023/2024 review confirming no loyalty penalties, no unintended consequences, and market stability—Ireland was first EU state with such a ban. Firms compliant since 2022 face ongoing low-risk monitoring; non-compliance risks enforcement under Section 48(1), but positive outcomes reduce immediate pressure. Matters for
Who is Affected
Summary
Review finds that differential pricing practices can result in unfair outcomes for some consumers Proposal to ban the practice of ‘price walking’ to end the loyalty penalty for consumers who do not switch insurance provider regularly Proposals will ensure that new business discounts are still available to allow consumers to seek the best prices, while ensuring that those who remain with the same insurance provider are not penalized The Central Bank is proposing to ban the practice of price wa...