BBC consumer programme Watchdog has hit out at insurers for hiking renewal rates while offering cheaper deals for the same cover online.
Insurers have responded by vowing to renew the way they generate quotes for new and renewal customers. The programme, which aired yesterday, criticised the practice of insurers increasing renewal premiums for existing customers but offering far cheaper prices to new customers for the same cover on online price comparison sites.
Watchdog gave several examples of cases where customers had received sharp increases to their motor policies, gone online to find a cheaper deal and found one from their existing provider. In particular it highlighted examples from Admiral, RSA brand More Than, and AXA brand Swiftcover.
In one example, More Than quoted one customer a renewal rate of £750, but on consulting a price comparison site, the customer found that More Than would offer him the same cover at £512.
The programme said Admiral raised a customer’s renewal premium for his two cars to £2,000 from £1,000, but he found the same cover from Admiral online for £961.
In the Swiftcover example, a customer of four years receiving a £100 renewal hike signed up as a new customer and got a cheaper deal.
In the three cases, the insurers honoured the lower prices the customers had found. Watchdog said.
In a response to Watchdog’s findings, an Admiral spokesman apologised for the “extreme increase” in the example. The spokesman said that new business and renewal customers are assessed independently but added: “We are aware this has caused some problems and have been working on a change to our systems that will help resolve this problem.”
Swiftcover motor director Sarah Vaughan told the BBC: “We have recently changed a few elements of our question set for new business customers which will allow us to offer more accurate quotes. We will be rolling this out to renewal customers too, but in the meantime we are happy to deal with individual customers on a case-by-case basis.”
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