Industry admits to using Price Discrimination in the insurance market – Pearse Doherty TD
Sinn Féin Finance spokesperson Pearse Doherty TD has called again for an immediate investigation by the Central Bank into the practice of dual pricing by the insurance industry. This comes after Aviva Ireland admitted in the Finance Committee that they used dual pricing to increase the premiums of existing customers on renewal.
Speaking at the Finance Committee, Deputy Doherty said this practice was designed to identify customers who are likely to renew and then punish their loyalty with higher premiums.
The Donegal TD said:
“Today at the Finance Committee Aviva admitted it employs dual pricing, or price discrimination, to target one third of loyal customers with higher premiums at renewal.
“This is the first time an insurance company in Ireland has admitted to using dual pricing, a practice which is known to harm vulnerable consumers.
“Insurance companies are using data analytics and complex algorithms to target customers who are viewed as being less ‘price-sensitive’ or more likely to renew, and then hiking their premiums on renewal.
“This practice is known to harm vulnerable customers, particularly those who are older or from lower-income households.
“Today at Committee, representatives from AIG admitted that dual pricing was about identifying customers who were more likely to renew their policies and then punishing them with higher premiums.
“This is a startling admission that the industry is employing pricing methods that target vulnerable consumers without them knowing it is even taking place.
“That is why I have asked the Finance Committee to begin an investigation into this issue.
“Today Aviva admitted to using price discrimination, but I have evidence that is a practice being carried out by several insurance companies in the State.
“I will be meeting with the Consumer and Competition Commission in the coming weeks to make the case for a market investigation into this aggressive pricing strategy that targets loyal and vulnerable customers.”