Update: insurers must now print last year’s premium on renewal notices

Loyalty is an illusion for many, kel. It is not an essential factor for most businesses, nor most consumers in my view. “Loyalty” cards, for example, simply extract data from the customer, and give benefits in return – just a business relationship I believe. I have no hesitation in shopping around to get the best deal; my priority is to spend my money prudently where I can, not to support an anonymous organisation. Exceptions of course would be organisations where have friends, and family naturally. I think we should ditch the idea that any company (or public body for that matter) is going to, in general, be loyal to us and concentrate on the reality of relationships.

Agreed Mal, biggest example of where loyalty went out the window is the Energy companies,. During austerity period they did not care a toss about their customers just put their tariffs up by horrendous amounts absolutely no consideration for the bill payer just profit driven. That is when all if any loyalty went out the window . As an add on I have just changed Home Insurance to another company same level of cover at a lower renewal fee.

Another insurance policy I have with Nationwide expires on 26 April 2017. The renewal notice was issued on 1 April 2017 but does not include details of last year’s premium. The other new requirement [a shop around suggestion] does not apply in this case as the policy was new last year. I am both surprised and extremely disappointed by Nationwide who claims it is “on our side” and has had plenty of time to implement this change. I had hoped it would introduce the new measure t the earliest practical opportunity and not wait until the last minute [and then fail to comply]. It’s a good quotation though so I am tempted to renew after some discussion with the office.

You may find part of the increase is down to a change in insurance tax.

In July 2015 the standard rate of insurance premium tax was raised from 6% to 9.5% and then again to 10% in the 2016 budget; it is going up again on 1 June 2017 to 12%. [The higher rate of 20% applies to travel insurance.]

Some insurers absorbed some or all of the first of those increases but have now started to factor it into their premiums. It is becoming a pernicious additional tax that is hitting homeowners hard and increasing rents and leaseholders’ service charges. But that only accounts for a small part of the premium increases so to some extent we are all paying for the flooding and storm damage of recent years, the increasing tendency to claim against insurance policies, and insurers’ uprating of their perceived risk factors ostensibly based on claims experience.

Over recent years insurers have curtailed cover, introduced further restrictions and limits, raised compulsory excess levels, reduced administration costs by use of the internet, transferred much expense to customers by requiring them to print off their own documents, and enjoyed reductions in corporation tax – yet premiums keep on rising. Perversely, intense competition might be one of the reasons; offering substantial discounts to new customers for the first year is leading to a lot more churn which gives rise to unrecovered administration costs and more commission to comparison sites, and for continuing policy holders it means a hefty rise in premium on the first renewal if accepted by default.

Although the regulations requiring the previous year’s premium to be shown clearly on renewal documents with effect from 1 April 2017 have been in existence for some time the industry has shown a very bad grace towards implementing this and has put it off until the very last minute when it became compulsory – even in my case on renewal documents dated 01:04:17 when the excuse given, without apology, was that they were prepared prior to that date so did not need to comply; that was Nationwide Insurance [provided by UK Insurance] whose behaviour has been very disobliging to say the least and far from the spirit of a mutual organisation [which, of course, UK Insurance is not, merely a contractor to the Nationwide Building Society].

As an aside, I have found in the past that organisations like the John Lewis Partnership and the Nationwide Building Society find it very difficult to hold on to their values and ethics – the principles that make me want to do business with them – when contracting out certain commercial functions.

My renewal from M&S was £261 up by £25 or so on last year. Meerkat’s comparison site check showed the same cover for £200. Had a truly incomprehensible conversation with an M&S rep who (I think) refused to haggle or negotiate, so while I was keeping him talking I was also ‘renewing’ as a new customer via the comparison site. When I told him I was about to press the confirm-payment-now-button he said he could ‘manually renew’ the same policy but at the comparison-site price. I asked him why on earth should I help M&S avoid their cancellation cost and their set up cost when he had already deceitfully told me he couldn’t bring the renewal price down. And I pressed the button…to achieve £15 cash-back (good) and Meerkat Cinema tickets (who cares). At which point he congratulated me on taking out the new policy and said there was a special promotion on ending that day (yeah – I believe it – not) of a £40 M&S Voucher which I would now receive. This is truly Kafka-esque nonsense. But I would appear to have avoided (I hesitate to use the word ‘saved’) £116 while it has cost M&S cancellation and setting up and commission costs. If this is not a sympton of a broken market I don’t know what is.