It feels like only a few months ago that I had the annual argument with my insurer about the enormous rise in my car insurance premium for no apparent reason, but it’s here again and so is that feeling of déjà vu.
Last year my comprehensive cover with protected NCB was just over £600. I’m old(er) and drive a Volvo. It had a huge excess to keep the premium low, but I paid after much wrangling. This time, my renewal has arrived and the opening gambit… just over £1,000! Yup… a 60% increase for pretty much nothing. My risk is identical. Well, other than the fact that I am a year older and wiser and my car is a year older and a bit cheaper. Reading this I know you are thinking about what I did next and you’d be right. I did do a new business quote and of course, you know the answer to that too! £587 to be precise. I forgot to put on protected NCB, but when I did it came in at a smidge over £600, but with a far lower excess. How can this be? I must have altered some details because surely, this can’t be right. Sadly though, it was right. I hadn’t changed any details, I was just being conned. I know that’s a pretty strong word, but if my risk is £600, it is £600. Not £1,000. I called them and of course, they were really apologetic and they agreed that they were not treating their customer fairly, but two years on the run now this has happened so I’m leaving them for pastures new.
I got to thinking about my past career as an insurance broker and how to me, renewal retention was everything. Loyalty discounts, reduced add on prices and preferential instalments were all offered to retain business. It seemed obvious then, but now I’m questioning it, that a customer with whom I already had a relationship with and no longer needed to market to, would be cheaper to care for and therefore would attract cheaper renewal premiums. I had no advertising costs or acquisition costs so these were my prime customers. I simply cannot comprehend why a household name would double my renewal premium only to halve it when questioned. I’m now a statistic and so is my wife who will leave next month. No chance of my household insurance either so really a bit of a disaster for them. What do they care though, they are a multibillion-pound concern so my Volvo and my fair treatment are not high on their agenda. Shame really.
One thing I do know is that this cannot be because of a lack of technology. Here at SSP we have been deploying our intelligent quote hub for a number of years now and it is such a simple tool to use. Although it’s really powerful, it doesn’t take a programmer to work it. A good business user can adapt premiums and rules, can amend quote flows and can use external data sources to absolutely get the best price for a risk. Alongside Verify, our award-winning fraud prevention tool, an insurer or broker can adjust process really quickly and react to market conditions. Gone are the days of waiting for a rates release! With our policy admin solutions allowing for capping and collaring, there really is no excuse for not being as competitive as your rates allow. There is certainly no need for overcharging and losing customers… unless it’s part of your business model… which would be weird.
If you want to know how to retain more middle-aged Volvo drivers, get in touch.
About the AuthorFollow on Linkedin More from Peter Gregory