Renewal cheaper than comparison

RL11

Since the FCA changed the rules on renewal pricing, it has always been cheaper to accept my renewal price, for house and car insurance, than go to a comparison site - even for the exact same insurance, from the exact same provider. At the same time, insurance costs have increased considerably. My take is that the FCA interference, has actually caused an increase in the cost of insurance for everyone! There is no longer any competition to gain a new customer, as existing customers can be still be charged a higher price at renewal, as long as a new customer is charged the same or more!

I keep hearing that material costs are the reason for rising insurance costs but I just don't believe that. I would be very interested to see an investigation into rising insurance costs and how this aligns to the rule change in Jan 2022.

Comparison sites for all products are/were so easy to use but regulators seem fixated on helping "the vulnerable" when the majority of "the vulnerable" are those that aren't actually bothered about the cost of things. It looks like we are going to interfere with supermarket prices next, whereby having a loyalty card getting you a better deal, is perceived as unfair!

Can we please go back to how things were, whereby those that don't bother to look, get charged a bit more for their lack of effort and those of us that do spend a bit of time searching out a better deal, are rewarded for our efforts.

DullGreyGuy

RL11 said:
My take is that the FCA interference, has actually caused an increase in the cost of insurance for everyone! There is no longer any competition to gain a new customer, as existing customers can be still be charged a higher price at renewal, as long as a new customer is charged the same or more!

The FCA predicted that for those that shop around it is likely that it would increase their costs and also acknowledged that it may negatively impact those in financial distress who would also be classed as "vulnerable". It ultimately deemed for the millions blindly renewing for 10+ years the benefit outweighed the other impacts. 

Competition still exists, there are mechanisms for pricing differentiation and you can still choose to write at a loss to gain market share just you need to do it across your whole book not cross fund it from older long term customers. 

Personally I'd prefer less of a nanny state but the number of people that used to post on here saying Granny was paying £800 a year for £30k of Home Contents etc would show at least some appreciate the new rules. 

born_again

RL11 said:

Since the FCA changed the rules on renewal pricing, it has always been cheaper to accept my renewal price, for house and car insurance, than go to a comparison site - even for the exact same insurance, from the exact same provider. At the same time, insurance costs have increased considerably. My take is that the FCA interference, has actually caused an increase in the cost of insurance for everyone! There is no longer any competition to gain a new customer, as existing customers can be still be charged a higher price at renewal, as long as a new customer is charged the same or more!

I keep hearing that material costs are the reason for rising insurance costs but I just don't believe that. I would be very interested to see an investigation into rising insurance costs and how this aligns to the rule change in Jan 2022.

Comparison sites for all products are/were so easy to use but regulators seem fixated on helping "the vulnerable" when the majority of "the vulnerable" are those that aren't actually bothered about the cost of things. It looks like we are going to interfere with supermarket prices next, whereby having a loyalty card getting you a better deal, is perceived as unfair!

Can we please go back to how things were, whereby those that don't bother to look, get charged a bit more for their lack of effort and those of us that do spend a bit of time searching out a better deal, are rewarded for our efforts.

Just google insurance losses for the last couple of years.

RL11

DullGreyGuy said:

Personally I'd prefer less of a nanny state but the number of people that used to post on here saying Granny was paying £800 a year for £30k of Home Contents etc would show at least some appreciate the new rules. 

It was only in his later life that I found out my Dad was being ripped off by Lloyds for years. He unwittingly believed that being a loyal customer of Lloyds (banking, credit card, house & car insurance) he would always get the best treatment. But once I found out how much he was being charged, I switched him to better deals and took over doing it from there. I think most that find out that Granny is being ripped off will do the same.

As the numbers of non-tech savvy continue to reduce, there should come a time when the only ones not bothering to shop around, are the ones that don't care about the cost. They can then subsidise the less well off.

RL11

Car insurance renewal price cheaper than comparison by some margin.
Last year £315 this year £295
Cheapest comparison site price £480!

DullGreyGuy

RL11 said:
As the numbers of non-tech savvy continue to reduce, there should come a time when the only ones not bothering to shop around, are the ones that don't care about the cost. They can then subsidise the less well off.

The problem is that tech isn't stationary and whilst those that have never used a PC or smartphone is getting ever closer to zero that isn't to say in the future there won't ve something else that comes in and we currently tech savvy types fail to adopt to.

Wasnt that long ago that SecondLife was seen to be a future thing, remember one banking group I was working with did a Graduate Recruitement drive virtually in SL. Im sure I could pick it up, though haven't played "proper" computer games in 25 years, but not sure that will always be the case. 

kimwp

I just price compared and it was cheaper than renewal. Plus £20 shopping voucher from the comparison website, made it nearly £50 cheaper than renewal. And about £75 cheaper than last year.

RL11

Every year, it always used to be cheaper going through a comparison site for me - Car & Home. Not anymore 
Wonder if they've now decided I'm getting old and don't want to be seen to be ripping me off at renewal  

DullGreyGuy

RL11 said:

Every year, it always used to be cheaper going through a comparison site for me - Car & Home. Not anymore 
Wonder if they've now decided I'm getting old and don't want to be seen to be ripping me off at renewal  

The law was changed to say you cannot charge renewing customers more than new customers. So in the old days you'd give a 30% discount to new customers funded by long term customers paying effectively over full price. When you average the whole population out you get to the full price/100% 

That practice has been banned now so assuming you still fit your insurers target customer and no one else has changed their profile to attract people like you its inevitable that your current insurer is likely to be one of the cheapest options unless they've had really bad years and had to hike everyones prices.