20th February 2014
Consumer watchdog Which? is calling on insurance companies to show people their last year’s premium alongside any renewal quotes to help encourage them to shop around for a better deal.
New research from Which? found that the majority of consumers support having their previous premium on their renewal quote, with nearly nine in 10 or 85%, saying it would be useful.
Some six in 10 or 62% find it annoying that it is not included and only 7% agree that it would be hard for companies to do.
Without this information, people lack the incentive to shop around as they are not able to easily see if they are paying more and why says Which?.
Just over two-thirds of respondents, at 68%, say having last year’s premium would prompt them to look for a better deal with other insurers, and around the same amount at 64% say they would be more likely to haggle for a discount with their current insurer if they had this information.
Clearer information would empower consumers to more easily compare quotes and could help them save money. A separate survey of Which? members reveals that people who haggled and switched providers on their car insurance managed to save an average of £131 on their renewal offer while those who did nothing paid just £4 less. Those who switched providers saved £105 on average.
The “We don’t want to pay a premium campaign” campaign is calling on insurance companies to provide last year’s premium alongside the renewal quote and explain any differences.
It wants insurers to also provide customers with their number of years of no-claims-bonuses and make sure renewal letters are received by the customer at least three weeks before the insurance is due to renew.
Only one of the major car and home insurers surveyed by Which?, Swiftcover, already provides last year’s premium on car insurance renewal reminders but there is no reason why other companies cannot follow this approach argues the group.
Which? executive director, Richard Lloyd, says: “Our research shows it pays to shop around when renewing your insurance, and that’s good for all consumers too as it helps keep the market competitive. But it’s not easy to find a good deal if you don’t know what you paid last year.
“People have told us that if insurers made it easy to find out the cost of their old premium it would prompt them to look for a better deal or haggle for a discount. So we’re asking people to support our campaign calling for all insurers to be more upfront when they send out renewal notices by showing customers the premium they paid last year and explaining any differences.”
Huw Evans, director of policy, at trade body, the Association of British Insurers says: “Insurers agree that it is important for customers to take advantage of a competitive insurance market and shop around and most already do; 73% of customers have shopped around for motor insurance, and 75% of people shopped around for a home insurance provider. But renewal should never be just about price; getting the right cover for your needs is vital. We look forward to continuing to discuss with Which? and other consumer groups how best to help customers make informed choices about the best cover for them.”