Insurance loyalty penalty changes

We’ve all felt pretty fed up when we see new customers getting deals, while loyal customers are invariably asked to pay more for a service like insurance. It then requires shopping around and negotiation. That may change…

Citizens Advice has responded to plans announced by the ABI (Association of British Insurers) and BIBA (British Insurance Brokers’ Association) today to take action on excessive differences between new customer premiums and renewals:

Gillian Guy, Chief Executive of Citizens Advice, said:

“Today’s announcement shows the industry recognises the scale of this problem and is willing to act responsibly to stop consumers being penalised for their loyalty. Our research found that long-standing home insurance customers can pay an average of £110 more a year than new customers.

“The devil, however, will be in the detail – whether this is successful will depend on prices actually coming down for loyal customers.

“The industry should also work with the Financial Conduct Authority to collect better data on the scale of this loyalty penalty. Then we can assess whether this unfair practice is being tackled effectively.”

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