Since April 2017, insurers and brokers have been required to publish last year’s premium on your renewal letter. However, it would seem that not all firms are following the rules…
For those of you who followed our ‘Don’t pay a Premium’ campaign, you may recall that we celebrated a huge campaign win when the Financial Conduct Authority (FCA) finally agreed that insurers and brokers should be forced to publish the details of last year’s premium.
As of April 2017, insurers and brokers must print last year’s premium ‘clearly, accurately and prominently’ on customers’ renewal notices.
When the new requirements came into force in April, we asked you if you’d spotted the changes on your renewal letters. And a couple of eagle-eyed Which? Conversation community members, John Ward and Carol Brock, spotted that their renewal notices dated 1 April didn’t include any indication of what they’d paid the year before.
‘The renewal notice was issued on 1 April 2017 but does not include details of last year’s premium. I had hoped it would introduce the new measure at the earliest practical opportunity and not wait until the last minute [and then fail to comply].’
And Carol said:
‘Had my renewal quote for building and contents dated 1/4/17. Last year’s premium not quoted, but it has increased by £27.12.’
Perhaps these could have been forgiven as oversights on the day the new rules came in. But then in June, another Which? Conversation commenter Alan told us:
‘Just checked my cars’ renewal notice and they haven’t included any details of the premium for last year’
The FCA has now admitted that there have several examples of firms who have failed to comply fully with the rules, by obscuring the required information for example, and people may have lost out as a result.
We think this simply isn’t good enough. The intention of this requirement is to make firms to give customers a clear and accurate comparison with what they paid the previous year, so they knew what they were paying for, and might be prompted to shop around.
Treating customers fairly?
We expect the regulator to take a strong stance against companies who are still trying to pull the wool over their customers’ eyes by being less than transparent about price rises. Fines and compensation should not be off the table.
Separately, a new Which? Money investigation has found several major insurers are making it hard for customers to evaluate their renewal offers by blocking them from checking the prices offered to new customers. While there can be reasons for doing so, and insurers commonly attract new customers with discounted offers, it means some customers can’t be entirely sure that what they’re being offered is the best deal actually available. The full investigation will appear in the December edition of Which? Money magazine.
These kind of practices indicate that the financial services industry still has a way to go to improve its culture. Treating customers fairly? For every good bit of work done by firms to put their customers first and act in their interests, examples like these simply serve to question and undermine trust in the insurance industry.
If your insurance is coming up for renewal, don’t simply accept the offer from your existing provider. Shop around and compare what you’ve been offered with other companies’ prices – use several price comparison websites. Even if you’re happy with your current insurer, make sure you haggle – our survey last year found this saved people over £60 on average.
Have you received an insurance renewal letter recently – did it included last year’s premium? How easy is it for you to compare insurance prices and shop around?