JP Morgan gives analysis on what blanket ban could mean for insurance prices 

Home insurers may have to raise rates by a fifth if the FCA goes for the toughest course of action in its dual pricing crackdown.

Analysts at JP Morgan believe home insurers would have to raise rates by 22% to remain profitable if the FCA puts a blanket ban on charging higher premiums to customers who fail to switch deals each year. 

Insurers will be ‘clearly loss making’ if the FCA takes the action, the report says, although motor will be hit less hard.

‘In our view, the key risk is that actions to eliminate excessive pricing cannot be fully offset, in which case overall profitability would fall,’ the report added.

The report adds that the FCA could take less tough action such as capping prices, ordering increased transparency or enforcing all firms to have pricing directors responsible for monitoring and oversight of the issue. 

At the end of last year, the FCA unveiled a range of pricing measures which it could enforce. 

The FCA’s long-awaited course of action on dual pricing is expected to come out in the next couple of months. 

In addition to FCA actions, the CMA will be given a range of powers, including greater powers to fine errant insurers and brokers.