Insurance Renewals Face Watchdog Shake-Up
The insurance industry appears set to agree new standards to help people renewing insurance policies get better deals.
Following pressure from the consumer group Which?, the Association of British Insurers (ABI) has written to the Financial Conduct Authority, the City regulator, suggesting new minimum standards of information be set for those taking out car and home policies.
It would include, the ABI said, the premium the customer started the year paying alongside their renewal quote, so that they could be compared more easily.
New customers' policy documents would also include a clear explanation of any introductory discounts which may not apply when the policy is due for renewal.
The ABI announcement was made as separate research by price comparison website Comparethemarket showed the extent of possible savings through shopping around for better deals.
It claimed 17-20 year olds stood to save the most - £322 - though greater competition among providers was narrowing savings.
Huw Evans, deputy director general of the ABI, said: "Insurers want to make renewing your insurance policy easier and clearer to understand by reminding you of last year's premium and flagging up introductory discounts.
"Most of us have home or car insurance and it is important we have the information we need when it comes to renewal."
The ABI, which said it was pushing for the proposals to be implemented across the whole market, added that the proposed rules would also reflect the fact that customers arrange their cover in different ways, for example directly from an insurer, through an insurance broker or from their bank.
Which? executive director, Richard Lloyd, said: "The Association of British Insurers's proposed reforms would be a victory for the 30,000 people who signed our campaign calling on insurers to show customers the premium they paid last year.
"These simple changes could save people money by prompting them to shop around or haggle for a discount, and we urge the FCA to adopt the proposals."
An FCA spokeswoman said: "We welcome the ABI's contribution to the debate on helping consumers make better decisions at renewal time.
"We already have various pieces of work under way in this area and will continue to work with the industry as this develops.
"We will report back on our work in 2015 but we would encourage firms to develop innovative solutions that will benefit consumers in the meantime."
The ABI said it hoped to have the new renewal measures in place by December 2015.