Why Do Insurers Quote Silly Renewal Prices

molerat

then reduce it by 25% when you phone them.

Just had this and they immediately reduced it without any hesitation. It came down to a reasonable figure, already done my homework, and only 3% up on last year for a good policy with free monthly payments. Many people would immediately switch and not query with them. Their business model seems to be cheap to get new business and drive old customers away, are these silly renewal quotes losing them [STRIKE]business[/STRIKE] money ?

vaio

I think about it as a tax on the stupid/indolent that gets used to subsidises my premium

2010

In this country every service and all goods are overpriced, then it`s up to you to try and get the best deal you can.

tberry6686

got my renewal quote through for my multi car policy last week. 120% increase on last year. Phoned up admiral to say I would not be renewing with them and they dropped the price to £1400 telling me that no one would beat that price, Went online and within 10 minutes had a quote for £720 and will probably get lower than that with a bit of work.

Do insurance companies not value their customers at all.

Catden_2

Was with Tesco for a number of years their renewal this year was easily £100 more than most quotes.
Would they drop not a 1p he wouldn't even try, it was almost as if he took a dislike to me all he kept saying was we don't price match. :mad:
They did me such a good deal on my House insurance, I didn't hesitate to ring them about my car waste of a phone call.

I went with M&S as their best policy offers key care & RAC cover for a little less that Tesco basic. :j

brewerdave

Had my renewal quote for House Insurance from Tesco - up 38% on last year:eek: - phoned them and got a load of old flannel about "all insurance has gone up, you had a discount last year...blah di blah!"
Told him that I wouldn't be renewing ...he promptly asked what premium I was looking at - I said same as last year!!! ...he said he couldn't do that ...but after a couple of minutes came back with a figure only £6 more than last years !!(about 3%) - since that was virtually the same as the best I'd found online I stayed with them ...but what a palaver!

shedhead55

I think most customers just renew as they see shopping around as a hassle, same applies with energy suppliers. I'm sure the profits they make from that majority outweigh the customers they lose.

Personally I don't believe in giving companies that take the p at renewal time a second chance, I just go with the best quote I can get elsewhere.

dwight-van-man

An insurance company I used to work with worked on the principal that 25% of clients would renew regardless of renewal premium, hence why they often drop the premium if you query it. They just assume a lot of people will pay the higher sum, while they bring a tranche of new clients in with discounted deals and this cycle off-sets the loss of clients who go elsewhere. There was an industry stat a while ago that suggested that of the clients that did shop around at renewal, only 19% quoted with more than one company. Client apathy - insurance company profits (and subsidised premiums for switched on clients...)

huckster

Lazy renewal customers who just pay the premium offered, actually subsidise the cheaper premiums offered to new customers.

I have seen rating analysts working on premium rates and they have a very difficult job to do. How can they offer competitive premiums to new customers, while retaining as many good current risks as possible ? From what I have seen, they do take into account how many policyholders just auto renew. If every policyholder challenged their renewal premium, you would find that at some stage renewal and new premiums would level out. Also just to clarify, not every new business premium is cheaper than the renewal. It depends on how the rates have been calculated. New biz and renewal rates do vary for exactly the same risk.

keith1950

Hi, I never even wait for my renewal, I change every year, loyalty counts for nothing nowadays.

Just bought buildings and contents from Sainsbury's, not the cheapest net price I have had, but buildings and contents with full accidental for £118 and £80 quidco cackback so net price of £38.