Behind the FCA’s resolution to drive pricing transparency at renewal was a want to enhance the remedy of loyal customers, promote competitors, and tackle considerations about client engagement at renewal.
The regulator itself has stated it expects the principles will immediate extra procuring round.
We all know that every demographic has a unique ‘tipping point’ for procuring round, and that on common when worth rises go above £40, greater than 50% of the customers will swap to a brand new insurer.
We additionally know from our Insurance coverage Behaviour Tracker that customers are least more likely to store round once they understand no change of their premiums. In different phrases, customers are extra inclined to shoparound for a brand new quote when their premium has received cheaper in comparison with if it has stayed the identical.
The FCA’s requirement has meant onerous modifications to renewal programs and buyer communications. Will it’s value it and drive the modifications the regulator desires to see?
9 out of ten customers inform us that they already verify their premiums in opposition to the earlier 12 months. Of these, 75% declare to verify the earlier 12 months’s renewal discover, 13% verify by their financial institution assertion, and four% ask their present supplier what they paid final 12 months.
*On-line interviews carried out 10-12 April 2017 1,072 respondents.
Drawing consideration to pricing modifications to even the small minority of those that don’t verify will make a giant distinction on this quantity pushed market in any case.
The place the findings grow to be extra of a problem to manufacturers is of their expectations of how behaviours will change. 89% at the moment assume that insurance manufacturers give higher costs to new prospects than to loyal prospects.
They anticipate the FCA’s requirement will immediate manufacturers to change this behaviour.
The ultimate level to notice is that customers are very supportive of the requirement.
After we requested them why, the solutions centred on transparency and enhancing belief.
“Because it is a disgrace the way insurers are out to tempt new customers and ignore their loyal customers”
“Helps keep track of how much you are paying from year to year and gives a more real picture”
“Hopefully it will mean that either more people will switch as they’ll see how much the insurers are increasing their policy costs OR insurers will start rewarding loyalty and existing customers will get a fairer deal.”
“I want as much information as possible to ensure I get the best deal. As I keep previous year’s policy info, being informed about last year’s price saves me time researching.”
“Important for comparison. Insurance costs fluctuate, but often feel that you are not first offered the best possible premium and have to haggle instead”
“If your supermarket increased the price of a pint of milk you’d want to know why. Ditto with insurance premiums: is it my claims record, age, inflation or profiteering?”
These are early days in any case, and the disclosure will come as a shock to most motorists. Solely 1 / 4 of these surveyed knew in regards to the change.
Shoppers predict manufacturers to start out rewarding loyalty. May the FCA’s rule modifications be the immediate that offers manufacturers a selection to vary their priorities on acquisitions and renewals?
Mannequin the affect of this regulatory change
We’re serving to a few of our shoppers mannequin the affect of this regulatory change and what it means for his or her enterprise. If that is one thing you assume we may enable you to with then get in contact.