# FCA To Investigate "Dual Pricing"



## Shiny (Apr 23, 2007)

https://www.insurancetimes.co.uk/ne...-dual-pricing-super-complaint/1428383.article - _hopefully the link works_

About time too in my opinion. When i started in insurance many moons ago, loyalty was rewarded with renewal discounts and was always cheaper than a new business.

From both the Insurers and Brokers point of view, processing a renewal involved much less admin and man-hours, so the policy processing costs were always much less than setting up a new policy.

Then along came the direct car insurance markets and aggregator sites, buying in business as cheap as they could to build a marketing base for more profitable business such as home, travel and pet insurance. New customer discounts then became a thing and the rewards for loyalty disappeared.

Not that we do a great deal of personal car insurance, but in the last couple of years we have seen the reintroduction of loyalty discounts on renewals from our providers, which has been a welcome change. When the FCA force Brokers to encourage their loyal customers to shop around, then loyalty discounts make even more sense. Yes, we have to recommend people shop around, can you imagine going into Sainsburys and the cashier saying to you "I've noticed you've been shopping here a few weeks now, before you pay for this week's shopping, i would recommend that you try maybe ASDA or Tesco to see if you can get it cheaper".


----------



## Sharpy296 (Jan 18, 2017)

The company I work for are looking at loyalty bonuses being a thing and moving away from cheap new customer cover, we are looking more for sustainable long terms customers than one year wonders. 

Its the right call for this to be investigated


----------



## Sh1ner (May 19, 2012)

I mean these comments nicely and as topics in the spirit of debate because my words could be seen as being critical of your industry overall.
I applaud your willingness to be at the sharp end though and nothing I have written is to be construed as being critical of you personally.

Whilst loyalty should be rewarded I cannot help feeling that the cause of the problems is much deeper rooted.
I'm heartened that you see it as positive and as you actively run your own business you are obviously worth your opinion because you must be at the mercy of the providers to some extent but do you honestly believe ( I ask that as a genuine question, not an insult) that much will change.
It seems to me that without forced deep and fundamental corrections to the way the whole insurance industry operates nothing, will, actually change and there is also the question, over what time scale.
It is not just about cost but the whole range of services that are promised but frequently not delivered because they are designed to fleece rather than protect, partly I assume because people pay for the service before it might be required. The regulation and regulatory scrutiny is clearly lacking when such products are allowed to go unchecked.
Nothing seems to me, to be to be judged against an easily fully regulated and quantifiable baseline product for that type of service. They genuinely need to fear any regulator and the law. The penalties should be extreme and direct rather than being able to pass the ball back to the customer. Too big to fail should not be an option.
You presumably recognise the record and reputation of the industry is not great.

I do take your point but the supermarkets are somewhat different surely, as they deal in real time with real and tangible product and most have cashback, if you find the same product cheaper locally or other loyalty schemes. If prices are high, it is obvious and should be more quickly found out and addressed. Also they do not appear to try to retain your money and wriggle out of paying it back by various spurious administration charges payable to themselves.
Also you are not purchasing a compulsory product and can walk away without penalty at any time if you find a better deal. The same is definitely not true of insurance. Held to ransom would often be my assessment.
The whole supermarket system appears to me to be infinitely more transparent and customer focussed than that of insurance partly because the contact is direct.
It will always be a balance but should to me always err on the side of the customer rather than the provider. That way the providers might actually need to compete rather than confuse.
I am not saying the supermarkets are the good guys they are clearly not but they are possibly under faster closer scrutiny the insurance markets.


----------



## GP Punto (May 29, 2007)

I ended my working life as a Director of Willis and saw a lot of changes in the industry, dual pricing just seems to follow the pattern set by utility and cable TV companies and others who charge whatever they want to different customers according to their own criteria.

Its crazy to me that I can go to More Than for a premium of £x, 12 months later the premium is £x +25% for no change in risk and if I find an alternative they say they will match it, if I tell them my new price.

The world has gone mad and insurance companies are just representative of that madness,


----------



## Shiny (Apr 23, 2007)

Sh1ner said:


> I mean these comments nicely and as topics in the spirit of debate because my words could be seen critical of your industry overall.....


No worries. To be fair the business i run is far removed from the direct markets and we deal predominantly with commercial insurance. Commercial insurance hasn't really suffered with dual pricing like personal lines has and renewal retention has always been the focus with loyalty renewal discounts being offered by many insurers.

There have been lots of industry changes in the last few years and, as i mentioned, some of our motor insurance providers have already worked towards loyalty discounts, perhaps in anticipation of this happening. If the FCA insist on change, then change will happen. The FCA do issue hefty fines, very hefty fines, if i was hit i would have to close the doors and look for an insulated cardboard box to live in. Because of this we have to be concious of compliance at all times.

I think you've probably read too much into my Sainsburys analogy. The point is, if i have a loyal customer, who is happy with my service, happy with their premium etc, the FCA insist that I have to encourage them to shop around elsewhere. I don't know of any other industry where this happens.


----------



## Darlofan (Nov 24, 2010)

Until majority of customers switch and leave companies will carry it on.


----------



## Andyblue (Jun 20, 2017)

Let’s hope they look at and stop mid contract price rises on Broadband ! BT have tried this now over 3 years !


----------



## Andy from Sandy (May 6, 2011)

What has always disgusted me about car insurance is the points raised above; arbitrary renewal price, wriggling out of paying, having to go through a whole load of BS when trying to get a settlement, the having to pay an excess on any claim, how easily they have been defrauded adding to the problems the honest have to bare, etc.

And of course they operate for profit and their shareholders for something that is a legal requirement.

The response to the super complaint will simply be, "We do not stop our customers shopping around, nothing forces them to take the renewal." 

As a driver of 45 years it is fairly recent that car insurance is supplied with auto renewal, something else that gets my goat because I have to now actively contact them to stop it from happening when going somewhere else using a premium rate phone number which nets them extra money.


----------



## PugIain (Jun 28, 2006)

My insurance goes up every year.
Every year I have to call up and moan. They immediately drop money off.

Why. Surely the money they take off should be off anyway due to another claim free year (which currently stands at about 18!!)
Then any more should be a bonus.

Or am I being naive hmm?

I'll have to be looking at my phone/broadband too soon, that keeps getting a few pounds added on every year.


----------



## wish wash (Aug 25, 2011)

PugIain said:


> My insurance goes up every year.
> Every year I have to call up and moan. They immediately drop money off.
> 
> Why. Surely the money they take off should be off anyway due to another claim free year (which currently stands at about 18!!)
> ...


You would think so as that's common sense. When I renewed this year I knew I could get it £300 cheaper elsewhere.They said the current insurer wouldn't quote. Went else where and guess what, £400 cheaper and it was insured with exactly the same under writer that supposedly wouldn't re- insure me.

I think what's bumping the premiums is the amount of cars that are getting stolen so easily.


----------

