FCA is consulting on a proposal to require insurance firms to publish the previous year’s premium on renewal notices. It wants to address the problem of customers not actively engaging with the possibility that switching providers might be better for them. FCA has carried out a trial, and found that up to 18% of policyholders of house insurance policies either switched providers or negotiated a discount when they were specifically told what they had paid the previous year. FCA proposes:
- to require firms to disclose last year’s premium on renewal notices;
- to require additional disclosure when customers have renewed the same product four times or more, by specifically advising them they may be able to save money by shopping around;
- guidance on how firms can improve their processes around renewals; and
- guidance about records that firms maintain to demonstrate compliance, including a record of premiums.
Firms will have to encourage customers to shop around, and can provide them with other useful information, but not to the detriment of the required information. It will allow firms to present the information in a manner that works with their methods of customer communication. The rules will apply to all general insurance providers and intermediaries. FCA asks for comment by 4 March 2016 and plans to bring the changes into force on 1 January 2017 (Source: FCA Consults on Insurance Premium Publication)