Insurance -Automatic v Electronic renewals

icehotelj

Angry Newby.....

I have just had my annual house insurance renewal through from Tesco. I also have car insurance with them aswell. The automatic renewals are always considerable higher than cancelling the policy and logging on as a new customer on their website and putting in exactly the same details. I today saved £60 on house insurance and it is ususally similar for the car. Where is their customer loyality!

icehotelj :mad:

dunstonh

Where is the customer loyality!

There is none. Customers are not loyal.

I know it isnt what you meant but it works both ways.

mattymoo

icehotelj wrote:

Great reply to a new person, really makes me feel confident about posting on your web site!!!!!!!!!!!!!!!!!!!!!!!!!!!

:huh: :think:

You made a statement, asked a question and Dunstonh answered it - correctly as well.
Where is the problem?

iceman_2

dunstonh wrote:

There is none. Customers are not loyal.

I know it isnt what you meant but it works both ways.

Customers might be more loyal if they were given the same renewal quote as a new customer. I think thats the point the OP was making.

Optimist

icehotelj wrote:

Angry Newby.....

I have just had my annual house insurance renewal through from Tesco. I also have car insurance with them aswell. The automatic renewals are always considerable higher than cancelling the policy and logging on as a new customer on their website and putting in exactly the same details. I today saved £60 on house insurance and it is ususally similar for the car. Where is their customer loyality!

icehotelj :mad:

Its not just Tesco is all of them. I always do a new policy every year as its cheaper. Plus this year I found Quidco so got money back as well.

dunstonh

iceman wrote:

Customers might be more loyal if they were given the same renewal quote as a new customer. I think thats the point the OP was making.

It was the point he was making but its a chicken and egg scenario.

Providers cant afford to give renewals the same price as a new customer as there is no customer loyalty to stay put. With other providers willing to make a loss on the first year, customers will move around.

For as long as customers move around like they do, you wont find the providers offering the same price. Something has to stop but what is going to stop first.

icehotelj

I would be willing stay put and just renew the same contract with Tesco each year if it came in within a similar cost, it would save a lot of my effort and a huge cost to them. It must cost them hugely to cancel an existing contract and issue the new paperwork which has to be checked, amended, signed etc so the new business must be loosing out. When I questioned them about the same thing being cheaper on their web site I was told that new and existing buisness is run along separate lines.

jamesd

icehotelj, there is a solution: all existing customers shopping around, none taking renewal offers. As long as some do take them that creates a price differential for existing customers that can be exploited to subsidise the new business offers to all customers.

It can't be approached at the new customer side because that's a competitive market and the competitors will exploit the lower new customer rate.

Astaroth

The more people that shop around the lower the price differential will be though.

There are also the advantages when claims occur to having shown brand loyalty as the "benefit of the doubt" will be given and as a flip side, a claim within a short time of policy inception is a clear fraud indicator