How are insurance companies getting around renewal rules?

[Somewhatfoolish]

There is a recent rule that means insurance companies were supposed to be offering existing customers the same price as new customers.

However this appears to be nonsense and it's still much better to shift.

How are they getting around this rule? The obvious way, if I had to guess, is by saying quotes at 40 days(?) before inception are much more expensive. After all it's been a long-standing "trick" to arrange insurance about 3 weeks in advance of when you need it for the best prices. Have they just inverted that for the time when they produce the renewal quotes so that if you were even sooner you'd be screwed? If not, what's going on?

(Also, what imbeciles are offering me fully comp quotes for £150? Fairly stty policies so I've gone for better ones but seriously that's nuts )

[Sheepshanks]

They’re doing it by introducing new policies every year so your renewal quote is on the old policy, while the new one is cheaper.

[jondude]

Somewhatfoolish said:

(Also, what imbeciles are offering me fully comp quotes for £150? Fairly stty policies so I've gone for better ones but seriously that's nuts )

This is often done on comparison sites to get your business. That top slot on confused means a real lot.

I pay £130 fully comp for the runabout but only because TPFT (even TPO) is more expensive. In fact I think I also get some £25 voucher soon to use at Halfords

[OutInTheShed]

My fully comp is not much more than £150, but I suspect they'd value my car at or below my excess.
I'm relaxed about that.

[Chozza]

Somewhatfoolish said:

There is a recent rule that means insurance companies were supposed to be offering existing customers the same price as new customers.

)

What was reported and what the rule says arent necessarily the same thing !

As i understood it the rule was per channel - so different prices can be offered depending on the channel. So, Direct website , comparison site , phoning a renewal hotline , phoning a sales line might be considered different channels.

The rule was to protect the lazy ! so the intelligent shopper gains nothing

[Pica-Pica]

OutInTheShed said:

My fully comp is not much more than £150, but I suspect they'd value my car at or below my excess.
I'm relaxed about that.

Not really about the value of your car, more about the (risk) of damage to other cars/people.

[Dingu]

Broadly speaking, they aren’t getting round it.

[Dingu]

Sheepshanks said:

They’re doing it by introducing new policies every year so your renewal quote is on the old policy, while the new one is cheaper.

Stop making things up, I don’t really know what you get out of it.

[Griffith4ever]

Pica-Pica said:

OutInTheShed said:

My fully comp is not much more than £150, but I suspect they'd value my car at or below my excess.
I'm relaxed about that.

Not really about the value of your car, more about the (risk) of damage to other cars/people.

Indeed. My R8 V10 comes in at £210 , plus £6 to add the other half on the policy (who won't drive it...)

[Somewhatfoolish]

Dingu said:

Broadly speaking, they aren’t getting round it.

Why is it always cheaper for me to switch?

I understand of course that year I am theoretically switching to the lowest bidder but (a) that's not strictly the case as I evaluate the insurance and in some cases it ain't a good enough offering and (b) I assume given the freebies comparison sites give out that the cost of customer acquisition is huge so surely the insurance companies, if genuinely offering renewals the same prices, would be incentivised to actually offer then *better* prices for retention?

Edited by Somewhatfoolish on Saturday 8th April 22:02

[sixor8]

I used to switch most years but this year for 2 cars and motorcycle it wasn't worth it. I could have saved about a fiver but stayed with what I considered a 'good' company.

Not all policies are the same either. As well as inclusive things like personal injury or breakdown cover with some, the cheapest fully comp policies often specifically exclude windscreen cover.

[Sheepshanks]

Dingu said:

Sheepshanks said:

They’re doing it by introducing new policies every year so your renewal quote is on the old policy, while the new one is cheaper.

Stop making things up, I don’t really know what you get out of it.

Last year a girl in the LV call centre said (in a hushed voice) "try a new quote" when I rang to complain about the price increase. New quote was back to the previous year's price, and the policy looks identical in all its main features.

And that's the second time LV have done that, although the first time I was apparently on what they termed their classic policy (classic policy, not classic car).

There's many posts in car forums from people who get a lower price from their own insurer when they put their details into comparison sites. It doesn't alwys happen, but it's certaintly not consistent that existing customers get the same price as new customers.

[Gerradi]

Last year a girl in the LV call centre said (in a hushed voice)...
Calls are recorded ... hushed or not...

[Sheepshanks]

Gerradi said:

Last year a girl in the LV call centre said (in a hushed voice)...
Calls are recorded ... hushed or not...

It was bit odd really, done very much in a ‘I’m not supposed to tell you this, but…’ way. I don’t know, I suppose they only listen if they need to. I wouldn’t have paid the increase so they’d have lost me as a customer if she hadn’t said that.

[DanL]

Somewhatfoolish said:

Dingu said:

Broadly speaking, they aren’t getting round it.

Why is it always cheaper for me to switch?

I understand of course that year I am theoretically switching to the lowest bidder but (a) that's not strictly the case as I evaluate the insurance and in some cases it ain't a good enough offering and (b) I assume given the freebies comparison sites give out that the cost of customer acquisition is huge so surely the insurance companies, if genuinely offering renewals the same prices, would be incentivised to actually offer then *better* prices for retention?

Edited by Somewhatfoolish on Saturday 8th April 22:02

The last couple of years it’s been cheaper for me to stick with my current provider, but this year I changed based on comparison site quotes.

If it’s cheaper for you to switch, that doesn’t mean that your current insurance company is offering new customers a better deal - it means other companies would like to buy your business by undercutting them.

If you can get a quote for identical cover from your current provider for less than your renewal then I’d say you have a point, but I don’t think you’ve stated that in your posts?

[Sheepshanks]

DanL said:

- it means other companies would like to buy your business by undercutting them.

Of course that also means those companies have to give their existing customers the same low price.

That doesn’t sound like it’s going to end well for consumers.

[Dingu]

Jesus wept.

All companies use their own data to price insurance. As a result different companies will price the same details differently. At the same time they will monitor their overall loss and expense ratios to check overall they are making profit. Or if desired to lose x to win business if they want to.

They will then adjust their overall base rate up or down to try an d protect margins or win business, simultaneously updating and improving pricing of different risks.

There is absolutely nothing in any regulation that says a company must offer a competitive renewal, simply that the same details must have the same treatment at NB and Renewal (or more favourable at RN), with some allowance for different channels (you will often get different prices through different aggs, the various aggs charge different amounts for the business).

Insurers are required to meet solvency rules so the chances of a car insurer going totally bust isn’t particularly high.

[Dingu]

Sheepshanks said:

Dingu said:

Sheepshanks said:

They’re doing it by introducing new policies every year so your renewal quote is on the old policy, while the new one is cheaper.

Stop making things up, I don’t really know what you get out of it.

Last year a girl in the LV call centre said (in a hushed voice) "try a new quote" when I rang to complain about the price increase. New quote was back to the previous year's price, and the policy looks identical in all its main features.

And that's the second time LV have done that, although the first time I was apparently on what they termed their classic policy (classic policy, not classic car).

There's many posts in car forums from people who get a lower price from their own insurer when they put their details into comparison sites. It doesn't alwys happen, but it's certaintly not consistent that existing customers get the same price as new customers.

So You have taken one conversation with one agent at one insurer and extrapolated. Got it.

[Dingu]

Somewhatfoolish said:

Dingu said:

Broadly speaking, they aren’t getting round it.

Why is it always cheaper for me to switch?

I understand of course that year I am theoretically switching to the lowest bidder but (a) that's not strictly the case as I evaluate the insurance and in some cases it ain't a good enough offering and (b) I assume given the freebies comparison sites give out that the cost of customer acquisition is huge so surely the insurance companies, if genuinely offering renewals the same prices, would be incentivised to actually offer then *better* prices for retention?

Edited by Somewhatfoolish on Saturday 8th April 22:02

They could offer better renewal prices if they wanted to. But as you state yourself you are comparing different insurers which has nothing to do with GI Pricing regs at all

[Somewhatfoolish]

Dingu said:

Jesus wept.

All companies use their own data to price insurance. As a result different companies will price the same details differently. At the same time they will monitor their overall loss and expense ratios to check overall they are making profit. Or if desired to lose x to win business if they want to.

They will then adjust their overall base rate up or down to try an d protect margins or win business, simultaneously updating and improving pricing of different risks.

There is absolutely nothing in any regulation that says a company must offer a competitive renewal, simply that the same details must have the same treatment at NB and Renewal (or more favourable at RN), with some allowance for different channels (you will often get different prices through different aggs, the various aggs charge different amounts for the business).

Insurers are required to meet solvency rules so the chances of a car insurer going totally bust isn’t particularly high.

I understand this, but if they are playing a completely straight hand then is there not something wrong with their models if one year their model spits out that I am one of their lowest risk customers, but the next year, despite (for all they know heh) driving impeccably, I'm not. But then the year subsequently I am.

The only way I understand this is if I'm a statistically unprofitable customer (and god knows I'd never insure me for £150) who is basically riding the outliers of their models... I mean it's possible; I certainly optimise my quotes with things such as applying at the right, choosing the right job description,, putting the right third party drivers on, and so on. But even so I think that's a bit facile... there must be something else goin on here, I'm pretty suspicious,.

To what extent do insurers even understand their quotes these days? By that I mean are they pure models created by actuaries or is there some AI driven stuff going on no one really understands?