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Auto-renewal - warns that new rules on displaying last year’s premium on renewal letters may not go far enough

28 March 2017
  • New rules aren’t prescriptive enough on wording or prominence on renewal notices;
  • People should be encouraged to shop around EVERY year at renewal – not just after four consecutive renewals;
  • To prevent underinsurance, the emphasis should be on cover, not just price.  

From 1 April 2017, insurers will be compelled to tell policyholders how much they are currently paying for their cover when they send out renewal reminders.  However, the new Financial Conduct Authority (FCA) rules* do not prescribe exactly how the information should be laid out. They simply state that it should be clear and accurate and in a prominent place, so that the customer can easily compare the renewal price with the previous year’s premium.

In an attempt to stop longstanding customers paying more for the same cover than new customers do, insurers will be required to identify customers who have renewed with them for four consecutive years.  Renewal notices issued to these customers will have to contain an additional prescribed message encouraging them to shop around: “You have been with us a number of years. You may be able to get the insurance cover you want at a better price if you shop around”.

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

Lee Griffin, chief operating officer of “Five years with the same provider is too long.  There is a real possibility that these customers will be paying too much for the convenience of allowing their insurer to simply roll their policy over, year after year.  We’d like to see a renewal process where customers are actively encouraged to shop around EVERY year.

“We welcome the fact that the FCA is trying to improve renewal information for consumers, and don’t want this call to action to be a missed opportunity. We will be keeping a close eye on how the rules are adopted by insurers, and the impact the new rules have on consumer behaviour.  There are already a lot of words on a renewal letter - which few people take the time to read – and there’s the potential that all this will do is add a few more.

“Insurers are very good at communicating the convenience and ‘peace of mind’ that comes from auto-renewing, and not so good at telling their customers that competitors could potentially offer the same cover, at a better price.  So it remains to be seen how insurers will respond to this requirement.”

Lee Griffin continued: “Unintentionally, consumers may be sent the wrong message.  In effect, it is implied that it is OK to stick with the same insurer for five years, and they only really need to switch after that.  A lot can and does happen in the world of insurance and often in a short space of time, so it isn’t safe to assume that the policy you bought last year is still the best fit and best value for you now, never mind one you bought four or five years ago.”

By using, customers could save up to £268 on their car insurance and £73 on their home insurance.**

Top tips from on getting the best insurance deals:

  • Give yourself time to review your financial arrangements, keep a diary note of key dates including car and home insurance renewals;
  • NEVER accept insurance renewal quotes without first checking that the new price you are being offered is competitive;
  • Compare prices AND check the small print.  Make sure you’re making like-for-like comparisons and understand all the charges, any penalties, exclusions and terms and conditions you will be required to meet, and that the product is right for you;
  • Use a comparison website – they provide quick and up-to-date information on a wide range of financial products and services.

Visit for more information on switching your car insurance or home insurance.

- ENDS -

Notes to editors:

*The Financial Conduct Authority (FCA) rules

To increase transparency and customer engagement in the renewal process, the FCA has issued new rules and guidance (Policy Statement PS16/21, August 216) on annual renewals of general insurance:

Presentation of the new premium

“The firm must provide the proposed premium to be paid on renewal in good time before the renewal of the policy.”

Presentation of historic premium information

At each renewal, insurers will be required to disclose the last year’s premium and include (unspecified) text to encourage customers to check their cover and shop around for the best deal.

Mid-term changes

Where one or more mid-term changes has been made, the insurer must calculate an annualised premium reflecting the premium in effect following the most recent mid-term change, but excluding all fees and charges associated with the change.

Fourth and subsequent renewal

Where the proposed renewal will be the fourth or subsequent renewal, the consumer has entered into in respect of the policy, the firm must add the following statement:

“You have been with us a number of years. You may be able to get the insurance cover you want at a better price if you shop around.”


The FCA says firms must communicate the information ‘clearly and accurately’ and ‘in writing or another durable medium’ and ‘in a way that is accessible and which draws the consumers’ attention to it as key information’.  Firms will be required to keep records that will enable the FCA to monitor the firm's compliance with the requirements under the regulatory system.

**Based on independent research by Consumer Intelligence during 01 January 2017 to 31 January 2017

   51% of consumers could achieve a saving of up to £267.50 with car insurance based on a comparison of 32 companies  

    51% of consumers could achieve a saving of up to £73.44 with buildings and contents insurance based on a comparison of 35 companies