The new Financial Conduct Authority (FCA) rules that require greater transparency from insurers at renewal time have officially come into effect.
Under the rules, insurers must provide consumers with the previous year’s premium price when it comes to renewal, as well as encouraging them to shop around.
Insurers will also have to identify those customers who have renewed several times in a row, giving them an extra push to check their cover.
So what’s been the reaction from some of the major insurance players?
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“The FCA’s decision to present last year’s premium at the point of renewal is a step in the right direction in providing clarity and transparency for insurance customers,” Gareth Howell, managing director, direct & retail partnerships at
AXA Insurance, told Insurance Business.
AXA was early on the uptake in providing customers with the previous year’s quote on renewal notices – a practice it began two years ago – and has recently begun including claims payout data across its business lines, Howell said.
“Initially when we made the change it prompted customers to contact us to discuss their premiums, however we welcome this as it provides another opportunity for us to communicate with them,” he explained.
Howell stressed that the move is a step forward for the industry in engaging with customers: “The insurance industry as a whole must continue its transformation from the old, transactional industry, resistant to change, to a modern transparent sector, eager to engage with its customer base.”
Aviva told Insurance Business that it welcomed the new regulation, adding that customer renewal letters would now also include prompts for consumers to check whether the right cover is in place and to shop around regularly for their policy.
“We are committed to improving transparency and helping to further enhance consumer trust in insurance,” a spokesperson for Aviva said.
“We continually review our documents to ensure they help explain the price, policy add-ons and what action the customer needs to take and we look forward to making more improvements in the future.”
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