On 18 December 2020, the Competition and Markets Authority (CMA) issued its final report following a market investigation into the supply of funerals and related goods and services in the United Kingdom.
The CMA’s investigation identified problems in the funeral services sector and proposed a package of ‘sunlight remedies’ to address these. Those remedies, including a legally binding Order to increase transparency in the sector, are intended to support customers when choosing a funeral director or crematorium and to place the sector under greater public scrutiny.
The CMA investigation recommended that the CMA Board should: (a) actively monitor market outcomes in the funerals sector, to identify and, where possible, address any harmful behaviour; (b) publish an annual review of market outcomes in the funerals sector; and (c) consider at the earliest opportunity when the impact and consequences of COVID-19 on the funerals sector are sufficiently understood and the sector is more stable, whether to consult on a future MIR.
Our team of Funeral Insurance experts here at SEIB Insurance Brokers have highlighted the key findings from the CMA’s first annual review of market outcomes in the funeral sector. Information provided by funeral directors and crematorium operators to the CMA to cover the period from 1 September 2021 to 31 August 2022.
The full CMA report can be found here.
Funeral Price comparison
The main finding from CMA’s first annual review is that funeral prices in 2021 and 2022 are at broadly similar levels to prices at the time of the market investigation. This represents a better outcome for consumers than funeral prices before the CMA’s investigation.
Average cost of Funeral Director’s professional services
Analysis conducted during the market investigation indicated that the average cost of the funeral director’s professional services had increased by an annual rate of 4.5% (1.6% accounting for inflation) between 2006 and 2019. Similarly, the amount spent on the cost of services provided by third parties had increased by an average rate of 5.6% (2.5% accounting for inflation) for cremations and 7.4% (4.3% accounting for inflation) for burials.
Market Investigation Reference (MIR)
Given the above assessment, the CMA Board is considering deciding whether or not to consult on an MIR, particularly because the impact and consequences of COVID-19 on the funeral sector are not yet clear and the sector is not yet stable following COVID-19.
The CMA will continue to monitor this sector closely and step-up enforcement where firms fail to comply with the Order.
Other Findings:
For funeral directors operating from five or more branches, the average revenue per funeral for the period from 1 September 2021 to 31 August 2022 was £2,639.
For funeral directors operating from ten or more branches, the average revenue per funeral for the period from 1 September 2021 to 31 August 2022 was £2,566.
