/ Home & Energy, Money, Motoring

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

In a big win for our ‘Don’t pay a premium’ campaign, the Financial Conduct Authority 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.

It’s a simple change and a win for the more than 30,000 people who supported our ‘Don’t pay a premium’ campaign. It should help people save money as our research has found that seeing last year’s premium encourages people to shop around or haggle for a better deal with their current insurer.

Support for printing last year’s premium

Charlie C told us on Which? Conversation last year:

‘My home insurance renewals have just come in and I was just thinking how it would be useful to have last year’s premium printed on the renewal notice… and then saw this!

‘I would support printing last year’s premium and in fact think it is scandalous to see the increases just hidden like this. Mine were set 20% higher this year, with no changes on my side and no claims.’

Treating customers fairly

The FCA is also reminding insurers of their obligations to treat customers fairly, especially their treatment of loyal customers at renewal stage.

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 is now asking for feedback on its proposals in a consultation that will close on 4 March 2016. We’ll be responding on behalf of the more than 30,000 people who backed our campaign – this is your win!

Update: 16 August 2016

Some good news finally emerged from the FCA last week with an announcement for implementation of the new rules for insurers and renewals notices – so it’s still a win for the campaign!

However, the expectation had previously been for these new rules to be in force by 1 January 2017, but firms must now comply by 1 April 2017.

The FCA has stated that information should be included clearly, accurately and prominently at renewal, and in a place that makes it easy to compare with the renewal quote. If adjustments were made over the course of the policy term then the insurer must include an annualised premium that will reflect those changes. This will apply to all annual and 10-month insurance policy renewal notices.

We’re hoping that insurers won’t wait until the last minute to comply with these new rules and start to introduce these changes to help their customers as soon as possible.

Update: 3 April 2017

As of 1 April, insurers must now show the price of last year’s premium on their renewal notices to show customers how much their policy has increased by.

Three years after Which?’s campaign for a more transparent renewal process began, the Financial Conduct Authority (FCA) has made it compulsory for insurers to make their pricing clearer to customers, along with advice about shopping around.

In an attempt to stop longstanding customers paying more for the same cover than new customers do, insurers will also have to identify customers who have renewed with them for four consecutive years.

The renewal notices to these customers must then contain an additional message encouraging them to shop around.

The new rules apply to general insurance products including car and home insurance. The FCA estimates that they will benefit consumers by £64 million to £103 million per year.

Are you due to renew your car or home insurance policy soon? Have you noticed any changes to your renewal notice?


I am happy to see insurers required to print last year’s premium on my renewal notice, but I usually forestall them by going somewhere else before expiry. If I could trust them to play fair every time I would probably await the renewal letter. I think every quotation should be their ‘best and final’ and not an opening bid in a bartering game.

Thanks Richard. It’s good to have some encouraging news on Which? Conversation.

Having to quote last year’s premium might put an end to annual price hikes. The danger is that insurers might reduce cover, in the same way that supermarkets reduce pack sizes as an alternative to putting up prices.

Not only do we need to be able to compare the premiums for this year and the covering year but we need to have a clear statement of any reduction in cover or increase in excess.

Be glad to see this proposal come into force, just received my car insurance renewal for next year [2016] and you guessed it up considerably.

Isn’t it funny that when you get your premium renewal all you need to do is ring them up and in seconds they can ‘reduce’ the premium or enter a ‘discount code’ and wham, your premium is back down to where it was. How many people just automatically renew and get a price increase?

There is no question what ever renewal you are looking for from various insurance, energy, telephone/broadband, banking, people should not except any renewal quote at face value, shop around and test the marketplace. One day your existing company will get the message ‘look after loyal customers’, until then show them no loyalty at all.

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.

This comment was removed at the request of the user

My home insurer used to give four weeks notice of the renewal; this year they rushed it out five weeks before the renewal date at the end of April 2017 to avoid having to quote the existing premium. I keep insurance policies in an easily accessible place and had already diarised the renewal date so I was ahead of the game. What I don’t like is the “you don’t need to do anything – we’ll just take the new premium from your bank account” line [although some people find it helpful because it avoids being uninsured for a spell].

Because insurance is so competitive I am concerned, like Wavechange above, that the companies will surreptitiously reduce their cover or make claiming increasingly difficult.

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.

Had my renewel quote from Sainsburys for building and contents, (it is a good policy), dated 1/4/17. Last year’s premium not quoted, but is has increased by £27.12. Although I always go on comparison sites, I have been with Sainsburys now since 2015 premium was £144.16, 2016 renewel £173.01 knocked them down to £158.78, this years renewel up to £185.90. There is no reward for sticking with the same company. The Meercats are quoting £147.09 with MoreThan for the same cover as Sainsburys! About to call Sainsburys, so will challenge the ‘non-quote’ of last years premium.

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.

Just checked my cars’ renewal notice from admiral and they haven’t included any details of the premium for last year. Very annoying as they don’t provide paperwork for current policies and everything is online. When renewal comes up they remove the premium cost from online information.

I recently received my car insurance renewal for a multi-car policy. The renewal told me the amount I had been quoted last year and warned me that I may have actually paid a different amount. The amount I actually paid was about £300 lower than the quote. Quote around £1000, paid around £700.

I’ve just received my Landlord insurance renewal quote from Direct Line and it doesn’t include last years premium or any suggestion to shop around.
Is Landlord insurance (home buildings and contents in this case) exempt on the grounds it is not a “general insurance policy”? I wouldn’t have thought so, in which case why are Direct Line blatantly ignoring the rules and what can I do about this in terms of reporting them?

Paul — Essentially, landlord insurance cover is a business policy and is presumably not subject to the obligation to provide the information on previous premium or on shopping around as insurers and brokers are obliged to give to personal customers for household insurance cover. It is possible that the risks or the required cover could change more from year to year with business policies so comparisons might be misleading.

Thanks John, I guess that makes sense, although at the end of the day “I” am buying the landlord insurance as an individual, not a business, in exactly the same way as “I” purchase the insurance for my own home, so from my point of view, there’s no difference.
No wonder these rules are confusing. Why they can’t apply the same rule to all renewals I’ll never no.
At the end of the day, the renewal should be providing the same cover as the original policy, so why wouldn’t a business, as well as an individual, want to be able to easily compare the “increase” as lets face it, the renewals are almost always increases as this is the way the insurance companies make more money.
Personally, I never renew and always get new quotes, which are almost always cheaper than the renewal, even if taken out with the same insurance company!

For all practical purposes, people who own and let property are regarded as running a business.

I agree with you that the same advice should be included in the renewal notification for both classes of customer, but insurance companies had to be dragged kicking and screaming into reminding their policy-holders of the previous premium and suggesting they look elsewhere to see if the same cover could be obtained cheaper.

Some insurers might have introduced the new advice before it became obligatory but most of them postponed compliance until the last possible minute; they are therefore reluctant to extend the practice further than they have to. This is the sort of mean behaviour that gives the insurance industry a bad name.