Lloyds fined £91mln over insurance renewals

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PLC () has been fined £91mln for issuing misleading insurance renewal claims and offering loyalty discounts that were never intended to be applied.

The FCA, Britain’s financial regulator, said insurance customers were misled on renewal charges over a period of eight years between 2009 and 2017.

People renewing were told the price was competitive when new customers got a better deal on the same products.

Around of 87% policies were renewed by customers receiving the letter.

Mark Steward, FCA executive director, said: ‘Firms must ensure their communications with customers are clear, fair and not misleading.

“LBGI [Lloyds’ insurance arm] failed to ensure that this was the case. 

“Millions of customers ended up receiving renewal letters that claimed customers were being quoted a competitive price which was unsubstantiated and risked serious consumer harm.”

Separately, the FCA added that Lloyds had sent letters to around 500,000 home insurance customers indicating they would receive a renewal discount, which they never did and that was never intended to be given.

The regulator said Lloyds has paid compensation of £13.6mln to date to those affected.

Lloyds said it had improved its processes in light of the regulator’s investigation.

Shares in Lloyds rose 1% to 46.07p.

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