The Association of British Insurers (ABI) and British Insurance Brokers’ Association (BIBA) have launched a set of ‘Guiding Principles and Action Points for General Insurance Pricing’ that the associations claim will address unfair renewal premiums.
After years of excessive renewal premiums, is the insurance industry finally about to end this practice?
Although the ‘Principles’ seem like a step in the right direction, they don’t actually cover much more than the current Financial Conduct Authority's (FCA) requirements. So yes, it does seem that this announcement could be too good to be true.
The commitment includes the following points:
- ABI and BIBA members do not support excessive differences between new customer premiums and subsequent renewal premiums that unfairly penalise long-standing customers
- ABI and BIBA members will take action so that customers’ tendency to shop around at renewal is not used to lead to excessive pricing differences that unfairly penalise long-standing customers.
- The ethos and approach to better outcomes for long-standing customers will be given board or senior management level priority and formally incorporated into firms’ procedures for determining the premium at renewal
- ABI and BIBA members should make clear in written, online or verbal customer communications that the new customer premium only applies for that year and subsequent renewal premiums may be higher
- ABI and BIBA members who impact the final premium paid by customers should review their pricing approach for customers who have been with them longer than five years and assess whether this approach delivers a fair outcome
- The ABI and BIBA will publish a report in no more than two years’ time that demonstrates how ABI and BIBA members have sought to tackle excessive differences between new customer premiums and subsequent renewal premiums that unfairly penalise long-standing customers
The action points also serve as a reminder to customers that insurers will often charge you more when auto-renewing.
Indeed, this can be as high as £279.42 for car insurance alone.*
Luckily, your friends here at GoCompare can often save you money on your insurance. Why not see if you could save yourself some money on your car insurance here?