Impact of New FCA Rules on Premium Finance
As inflation affects insurers and customers, stricter regulation of Buy Now, Pay Later (BNPL) may disrupt retail credit and create opportunities for fairer insurance payments.
Insurance, a unique finance sector, is not immune to macroeconomic forces like inflation. Motor and home insurance have been significantly impacted by rising repair, material, and labor costs, while life insurance has been less affected.
Higher interest rates, introduced to curb inflation, have helped offset some adverse effects by increasing yields on insurers' investment portfolios.
Greater regulation of BNPL could both disrupt retail credit and open new opportunities for fairer, simpler insurance payments.
This shift may lead to changes in the insurance industry, making payments more accessible and transparent.
Author's summary: New FCA rules may reshape premium finance.