FCA Premium Finance Report Confirms the Need for Clearer Pricing Metrics: Why TIC Matters Now More Than Ever

The FCA’s latest Premium Finance Market Study update, released today, has rightly grabbed the industry's attention. It highlights an issue that Consumer Intelligence has been discussing for a while: the critical importance of how insurers charge for monthly instalments and how clearly they communicate these costs to customers.

In our recent Instalments Insight Report, we analysed how UK insurers structure their premium finance offerings and benchmarked these using a key measure: Total Instalments Cost (TIC). The FCA’s new update aligns closely with our findings, emphasising TIC’s role as the fairest way to reflect the actual consumer cost of premium finance.

APR alone doesn't tell the whole story

One key point from the FCA’s report reinforces our stance: APR is a flawed benchmark when it comes to insurance premium finance. While the FCA found that around 60% of customers face APRs of 20%-30%, they also highlighted significant confusion and variation. In one example we analysed, a major insurer reduced their APR from 33.8% to 26.9%, but the Total Instalments Cost (TIC) remained at 11.37%.

This highlights the problem: APR changes, yet customers pay the same. That's why we have consistently urged insurers to measure, and benchmark based on TIC, a figure consumers see and pay.

Motor vs Home: A tale of two markets

The FCA’s paper confirms another key insight from our research: the striking difference between Motor and Home insurance. According to the FCA, fewer than 3% of Motor insurance customers receive 0% finance options, compared to more than a third in home insurance.

Our data aligns with this trend. The average TIC in Home insurance (around 8.1%) is notably lower than Motor (10.1%), primarily driven by the prevalence of 0% offers from banks and direct insurers.

Why the difference? Banks and direct providers are more easily able to offset costs within their broader customer relationships, underscoring the importance of effective distribution strategies for achieving a competitive advantage.

A market under scrutiny

The FCA report emphasises that premium finance generates substantial margins for some insurers, sometimes making up aa substantial part of non-core revenue. This is not inherently negative; it’s how these revenues are structured, justified, and transparently communicated that matters.

We’ve long argued that transparency and fairness must underpin premium finance offerings, especially now under the Consumer Duty framework. Insurers must be prepared to explain and justify their instalment pricing clearly, with solid benchmarking data to support it.

The first TIC quartile: Which insurers set the bar?

We are updating the exclusive insights from our Total Instalments Cost Report, naming the insurers who rank within the first quartile for TIC in both Home and Motor insurance.

These are the firms setting the benchmark for fairness and clarity, offering the best value to customers who pay monthly instalments. These insurers understand that competitive advantage doesn’t just come from pricing the annual premium low, but from transparently structuring monthly payments so that customers see and feel the value.

If you are not in the first quartile but you want to know how you performed just click on this link, ask and we will send you over your Quartile positioning, for free!

Total Instalment Cost (TIC) - First Quartile Ranking
Motor Insurance Provider	Home Insurance Provider
1st Central Plus	Aviva
1st Central Premier	Aviva Premium
1st Central Standard	AXA Home
Admiral	AXA HomePlus
Admiral Essential	AXA HomePremier
Admiral Gold	Halifax
Admiral LittleBox	John Lewis Bronze
Admiral MultiCar	John Lewis Gold
Admiral Platinum	John Lewis Silver
Aviva	M&S
Aviva Premium	MBNA
Aviva Zero	MBNA Plus
AXA	Nationwide
Axa Plus	Nationwide Plus
Collingwood	QuoteMeHappy Ess Plus
Diamond	QuoteMeHappy Essentials
Elephant	QuoteMeHappy Premier
Ford	Sainsburys
General Accident	Sainsburys Home Plus
Lloyds Bank Gold	Santander Classic
Lloyds Bank Silver	Santander Plus
LV	Sky
LV Extra	Swiftcover Home
LV Plus	Swiftcover HomePlus
Marshmallow Essential
Marshmallow Go
Marshmallow Lightest
Marshmallow Original
Marshmallow Plus
Moja
Moja Essentials
One Call Pay As You Drive
One Click
One Protect
Prima
QuoteMeHappy Connect
QuoteMeHappy Connect Plus
QuoteMeHappy Connect Premier
QuoteMeHappy Essentials
QuoteMeHappy Plus
QuoteMeHappy Plus Roadside
QuoteMeHappy Plus with Legal
QuoteMeHappy Premier
Sainsburys
Sainsburys Essentials
Sainsburys Plus
Swiftcover
Swiftcover Plus
Ticker Pay per mile
Yoga Insure

What should insurers do next?

This latest FCA report isn't just another regulatory update. It's a clear signal that insurers who continue to rely solely on APR, or fail to benchmark themselves against competitors using TIC, will find themselves increasingly vulnerable not just commercially, but also from a regulatory perspective.

If you're not sure where your brand stands, the time to act is now. Insurers must ensure they:

Benchmark TIC regularly against the market.
Understand precisely how their pricing strategies impact visibility and competitiveness.
Proactively justify the value they deliver to regulators and customers

What is really happening in the premium finance market and how insurers can respond confidently

fca, premium finance, total instalment cost

FCA Premium Finance Report Confirms the Need for Clearer Pricing Metrics: Why TIC Matters Now More Than Ever

APR alone doesn't tell the whole story

Motor vs Home: A tale of two markets

A market under scrutiny

The first TIC quartile: Which insurers set the bar?

Total Instalment Cost (TIC) - First Quartile Ranking

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