Aviva will sell motor and household lines through a platform that will "reinvent" the way insurance is sold and tackle the issue of dual pricing.
The platform, Aviva Plus aims to provide the same or better renewal prices to its existing customers, that it would charge its new customers.
However, it doesn’t mean the price will be cheaper or the same as the year before. If the premium is higher than last year, it would be higher for a new customer too.
The insurer said the platform will be rolled out by end of January, selling household and motor.
A number of randomly selected customers will be able to use the service online at the moment as it continues to data sample and ensure quality feedback, said the company.
It will be a subscription-style insurance where the equivalent of the premium is broken down into monthly payment without any interest charge or cancellation fees.
Andy Briggs, CEO UK, Aviva said: “We recognise that consumers want the insurance industry to listen to them so we have worked with thousands of customers to understand how insurance could better meet their needs and provide the flexibility they want for their modern lives.
“Aviva Plus is a reinvention of insurance, which has been developed and tested with customers’ needs at the centre, and it’s now starting to roll out alongside our existing products. Like subscription services, it’s designed to make it easy for customers to change their cover as often as they want without incurring charges.
“Importantly, Aviva Plus addresses price disparity, regarded by an overwhelming majority of consumers as one of the most unfair practices of the insurance industry. With our renewal price guarantee, which ensures existing customers are offered the same or even better price than an equivalent new customer, we are creating a level playing field for new and existing customers.”
Earlier, this year, an investigation into home premiums by Which, a consumer organisation saw that customers with combined policies owned for longer than a year were paying on average £75 (or 38%) more annually than new customers.
Citizen Advice launched a super-complaint to target dual pricing, following which, the Financial Conduct Authority launched its own review. In a report published last month, it highlighted serious concerns on consumers being fairly treated unfairly.
Since which insurers are looking at ways to address the pricing issue in the industry sought to bring significant market change.
Rob Townend, managing director UK general insurance, Aviva told Post: “The [Financial Conduct Authority] is looking at a market review of the motor and home insurance, specifically how renewal pricing works. We think this is a consumer focus solution, that starts to answer the regulator’s concerns.”
- Loss-making GRP spent £112.6m on acquisitions over its last financial year
- Mike Bruce promoted to GRP group managing director
- Hiscox's James Brady on why cyber knowledge remains a barrier
- I work in insurance: Stephanie Horton, River Canal Rescue
- Top 100 Insurtech: Quarter four update
- Insurtech diary: Getting stuck into insurance
- Charles Taylor bolsters liability team by hiring senior sextet from Vericlaim