Editor's comment: Which hat fits?


I wear many hats. As a single working mum, I have to deal with financing and running a household, managing a team of staff and producing a high-quality publication, and raising a rounded young man who I hope will take on the world in the future.

Sometimes I find myself moving between these roles quickly and swapping hats can be a challenge. I also have to remind myself there needs to be a place for the real me too. I wonder if insurers face the same problem, where they have direct arms, broker distribution channels, aggregators vying for attention and commercial customers seeking their help.

Could this be the reason for a problem that has been bugging the industry for some time, that of dual pricing? It’s hard to believe insurers deliberately charge loyal customers more each year and give them less attention on purpose, as retention is important and they can’t enjoy the label some members of the press have given them of ‘insurance pirates’.

Yet Money Supermarket has found the average home insurance policy increases by over £9 annually, which adds up to what it calls a ‘loyalty tax’ of £37m per year.

In April, the Financial Conduct Authority vowed to tackle this issue, and the regulator is due to release its report in autumn

So it was pleasant to hear this month that the British Insurance Brokers’ Association and the Association of British Insurers have already agreed some guidelines to tackle the excessive difference that exists between new customer premiums and renewals for longstanding customers.

Initially they will only cover personal lines such as home, motor and travel but I can’t help think these voluntary guidelines already look to fall short – as the advice is only to review those customers who have been with insurers for five years. With the fast pace of technology and on-demand service our consumer generation demands, will anyone be patient enough to stay with an insurer that automatically increases their premium every year for five years?

Along with my many hats, given my professional role, I’m also insurance advisor to the family and more than two years ago, I wrote to the industry about my mum and her dual pricing issue.

She (well, I) now checks her policy every year and makes sure she is getting a fair deal. She isn’t looking for the cheapest policy and likes to know she will get the right product but she also doesn’t trust the industry to give it to her at a fair price first time.

The industry has taken a small step in the right direction but isn’t it time it stopped trying to be all things to all men and quoted an honest price to all customers, otherwise the FCA won’t hesitate to really step in?

June 2018 Cartoon


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