Responding to news Citizens Advice has named home insurance as one of the products it believes is unfairly penalising loyal customers, ABI Director General Huw Evans said:
“In any market where there is regular switching and fierce competition for new business, good deals are available to those who shop around but this does mean long-standing customers can lose out. The insurance industry recognises this is a problem and earlier this year became the first and only sector to take voluntary, industry-wide action to tackle it. This includes commitments from firms to review premiums charged to customers who have been with them for five years and the industry publishing a report on progress within two years.
“In a competitive free market, where three out of four people shop around, there is no easy fix available and these measures will take time to bed in. But we believe that these industry commitments are a positive step in tackling excessive premium differences that can unfairly penalise long-standing customers.”
Background
The ABI and BIBA (British Insurance Brokers’ Association) jointly launched a set of Guiding Principles and Action Points to help tackle excessive premium differences between long standing and new customers in May.
Key commitments include:
- ABI and BIBA members will take action so that customers’ tendency to shop around at renewal is not used to lead to excessive pricing differences that unfairly penalise long-standing customers.
- The ethos and approach to better outcomes for long-standing customers will be given Board or senior management level priority and formally incorporated into firms’ procedures for determining the premium at renewal.
- The ABI and BIBA will publish a report in no more than two years’ time that demonstrates how ABI and BIBA members have sought to tackle excessive differences between new customer premiums and subsequent renewal premiums that unfairly penalise long-standing customers.
Read more here.