Having just received this from LV:
I'd like to tell you about a new regulation from the Financial Conduct Authority (FCA). For all motor or home insurance renewal quotes generated on or after 1 January 2022, we'll make sure the price you pay is the same or cheaper than if you were a new customer with us for a like-for-like policy.
This significant change will impact every motor and home insurer in the UK but it won’t affect your cover or the quality of our service.
I assume this means that new users will now pay a higher price to match existing customer prices of course. Might it go the other way and you start to get a loyalty discount perhaps?
The cynic in me sees "like-for-like" - ah yes, sir, your premium IS higher than a new customer, but you see, there are slightly different terms for the first year...
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Companies lose customers, yet companies wish to grow. Thus they will always strive to get more new than they lose existing.
Existing customers have an inertia and so the challenge to retain them is less than the challenge to gain them. Thus less incentive is required. And incentive is typically related to money, one way or another.
Consequently new customers will always be offered an advantage that existing customers are not.
>>The cynic in me sees "like-for-like" - ah yes, sir, your premium IS higher than a new customer, but you see, there are slightly different terms for the first year...
I'd say you are spot on, though no doubt the games to be played are many and complex.
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My (uneducated guess) is that there will be free gifts or cash back type deals for new custards.
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I have changed insurers - house & car fairly regularly in the past 55 years of car ownership.
2001 to 2015 I was with Esure paying a comparable premium to other "known name insurers"
2015 they decided to up house & car by around 50%. I spoke to them - "higher claims for people in your Post Code area"- BullSh1t - I had not claimed on either policy - they did not budge & I walked.
Every year since Esure have been around the same price point as what I am paying to L&G & LV but I will not go back to Esure even if they were the cheapest.
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Martin Lewis on MSE reckons:
"Everyone get quotes NOW, even if not near renewal, as in a month, new rules may mean costs spike
This is the day the regulator, the Financial Conduct Authority, brings in new, hopefully better rules to turn the mainstream insurance market on its head.
However, in the short run, this change could see a spike in prices for switchers".
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An end to insurance rate-hopping? - No FM2R
