The Financial Conduct Authority (FCA) said it will "consider" the evidence after a consumer investigation found that people with an ethnic minority background pay £250 pounds more a year on average for car insurance than white people.
The conclusion, part of a year-long study by Citizens Advice, found that people living in areas where there is a high proportion of people of colour paid at least £280 more for their car insurance.
“Their analysis highlights a risk of discrimination based on race and raises some potentially challenging questions for insurers,’’ the FCA said in a statement. “We will continue to consider any evidence we receive of concerns around pricing."
The study included 18,000 car insurance costs and 649 mystery shops using personas across eight postcodes.
Citizens Advice also said it stress-tested postcodes and found that risk factors such as crime rates, deprivation, road traffic accidents and population density could not account for the difference in price.
This "ethnicity penalty” suggests that people of colour could be paying at least £213mln a year more for their car insurance if the findings of its study were replicated across the country, the charity said.
It urged the FCA to take enforcement action against a firm that is unable to explain ethnicity pricing differences.
“For too long the impenetrable nature of insurance pricing has just been accepted, but a £280-a-year penalty cannot be allowed to continue,’’ said Clare Moriarty, chief executive of Citizens Advice.