In a huge win for our ‘We don’t want to pay a premium’ campaign, the Financial Conduct Authority (FCA) has announced proposals that will require insurers to publish details of last year’s premium on your renewal notice.
The FCA’s proposals are backed by its trial of more than 300,000 UK consumers, which tested reactions to different types of information being provided at renewal stage. Printing last year’s premium on renewal notices had by far the biggest impact, with 11-18% of people switching or negotiating a lower premium on their home insurance.
Our executive director Richard Lloyd comments on the FCA’s announcement:
‘The Financial Conduct Authority's proposal is good news for the thousands of people who supported our campaign for insurers to show last year's premium on renewal letters.’
Christopher Woolard, director of strategy and competition at the FCA, said:
‘We hope the proposals encourage more people to shop around for the best product for them. It is important that insurers give their customers the information they need to do this and ensure they’re treating their customers fairly.’
The FCA’s proposals are backed up by our own research, where 85% of people in our survey said it would be useful to have their previous year’s premium on their renewal quote. A further 68% said that having last year’s premium would prompt them to look for a better deal, and 64% said they’d be more likely to haggle.
Richard Lloyd added:
‘This simple change should help people save money by prompting them to shop around or haggle for a better deal with their current insurer.’
The FCA will be asking for feedback on its proposals by 4 March 2016. We’ll be responding on behalf of the more than 30,000 people who backed our campaign – this is your win!
In a win for our campaign, AXA has today confirmed that it is now including information on last year's premium on motor insurance renewals. The company will be rolling this improved information out to other insurance renewal letters from June, the first big insurer to do so.
Which? executive director Richard Lloyd, said:
'We have long campaigned for insurers to put last year's premium on the renewal so we welcome AXA starting to do this for their customers. Now we want the Financial Conduct Authority to make all insurers follow suit.'
Insurance giant AXA is the first of the big insurers to commit to including information on last year's premiums in renewal quotes.
Following our campaign, the Association of British Insurers proposed last year that companies should improve the information they provide on renewal quotes so that consumers can make informed decisions about the best policy for them . We know that the Financial Conduct Authority is looking at the issue, but it is yet to announce what action it will take, and until now, none of the big insurers have included information on past premiums in quotes to their existing customers.
AXA is the first company to make a public commitment to change its practices - we look forward to seeing others follow suit.
People renewing their car or home insurance could find it easier to shop around following new proposals set out by the Association of British Insurers (ABI).
The ABI has written to the Financial Conduct Authority, calling for new minimum standards of information to be provided to anyone taking out car or home policies.
As a result, renewal documents for motor and home buildings and contents insurance would include the premium that the customer started the year paying alongside their renewal quote, so that they could be compared more easily. The ABI hopes the proposals can be successfully put in place by December next year.
Huw Evans, deputy director general of the ABI, said: 'Insurers want to make renewing your insurance policy easier and clearer to understand by reminding you of last year's premium and flagging up introductory discounts.'
Our executive director, Richard Lloyd, said: 'The Association of British Insurers' proposed reforms would be a victory for the 30,000 people who signed our campaign calling on insurers to show customers the premium they paid last year.'
These simple changes could save people money by prompting them to shop around or haggle for a discount, and we'll be urging the FCA to adopt the proposals as soon as possible. In the meantime, we'll also work with companies to help them make these changes ahead of the regulator's intervention.
Our new research finds that the majority of people support having their previous premium on their renewal quote, with nearly nine in ten (85%) saying it would be useful.
Six in ten (62%) find it annoying that it is not included and only 7% agree that it would be hard for companies to do. Without this information, people lack the incentive to shop around as they’re not able to easily see if they’re paying more and why.
Which? executive director Richard Lloyd said:
'Our research shows it pays to shop around when renewing your insurance, and that's good for all consumers too as it helps keep the market competitive. But it’s not easy to find a good deal if you don’t know what you paid last year.'
Two-thirds (68%) say having last year’s premium would prompt them to look for a better deal with other insurers, and around the same (64%) say they would be more likely to haggle for a discount with their current insurer if they had this information.
Richard Lloyd added:
'People have told us that if insurers made it easy to find out the cost of their old premium it would prompt them to look for a better deal or haggle for a discount. So we’re asking people to support our campaign calling for all insurers to be more upfront when they send out renewal notices by showing customers the premium they paid last year and explaining any differences.'
We also want insurers to provide customers with their number of years of no-claims-bonuses and make sure renewal letters are received by the customer at least three weeks before the insurance is due to renew.
Only one of the major car and home insurers we surveyed, Swiftcover, already provides last year’s premium on car insurance renewal reminders but there is no reason why other companies can’t follow this approach.
You can help by signing out petition and asking insurers to take action.
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