Insurance companies disappearing

[-rick-]

This is not strictly a self build thing but I've just received a letter about my house insurance telling me Aviva have taken over my insurer. So far so routine, except this is the 3rd time in 3 or 4 years where I've got a letter saying Aviva is taking over my insurer. So that's three separate insurers that have now been absorbed by Aviva.

 

So that's Barclays, M+S Bank, Churchill, all gone. Apparently, Churchill were part of Direct Line and it's Aviva buying Direct Line that caused the latest letter.

 

Is competition disappearing from the home insurance market? Every time Aviva have taken over the renewal quote was at least double what I was paying before.

[Redbeard]

2 hours ago, -rick- said:

Every time Aviva have taken over the renewal quote was at least double what I was paying before.

 

... and logic does not necessarily seem to apply, anyway. I moved to Churchill as the renewal premium from the last insurer was silly-high. After 2 years with Churchill the price creep was not insignificant. I looked on Compare the Market. The best balance of cover and cost (not  identical cover, but v close) came from the company I'd left 2 years before because of their silly-high quote!                              

[-rick-]

18 minutes ago, Redbeard said:

The best balance of cover and cost ... came from the company I'd left 2 years before because of their silly-high quote!

 

The annoying game of luring in customers who are then too lazy to move. I'm one of those customers, if the bump was 20% I may well swallow it rather than faff around finding another company but when the quotes come in 2x that motivates me to move.

 

Feels like there is an opportunity for a company to come out and market on the basis 'we aren't the cheapest but you'll always get the our best price and we don't play games with you', but I'm not aware of anyone who does that.

 

If Aviva is swallowing up all the competition, soon enough there won't be enough competing quotes to make moving make sense.

[Gone West]

The FCA banned dual pricing at the start of 2022

Insurers are no longer allowed to charge renewing customers any more than they would charge a new customer for the same policy.

https://www.cuvva.com/how-insurance-works/dual-pricing-insurance-fca

 

[Mattg4321]

15 hours ago, Gone West said:

The FCA banned dual pricing at the start of 2022

Insurers are no longer allowed to charge renewing customers any more than they would charge a new customer for the same policy.

https://www.cuvva.com/how-insurance-works/dual-pricing-insurance-fca

 

It still happens though

[-rick-]

15 minutes ago, Mattg4321 said:

It still happens though

 

Does seem to. My case is a bit different as it's a change in company. When they've taken over their quotes have been consistently in the £200 range. I'm currently paying Churchil £80. (Contents only as I'm leasehold).

 

Insurance products a complex with lots of different line items. It's fairly easy for insurance companies to change their standard cover every year, so those who want to renew last years cover are then renewing a 'non-standard' cover and the price of that cover can be different to that offered to new customers. I think @Redbeard is a good example of that.

[Stu789]

Martin Lewis has covered the dual pricing rules a few times:

 

"...since January 2022, car and home insurers have been banned from charging renewing customers more than they charge new customers - to stop the annual 'price-walk' of pushing up prices at each renewal...The 'same price for both' rule is channel specific. For example, if you got insurance direct, your renewal must cost the same as if you were a new direct customer. If you had gone via a comparison site, it must cost the same as a new customer via THAT site (others may be cheaper)."

 

This presents a loophole to rotate around the different channels (direct; comparison site 1; comparison site 2 etc) to offer best deals through that channel (only) to acquire new customers while all the existing customers acquired through all other channels can be charged higher prices.

[SteamyTea]

16 hours ago, Gone West said:

The FCA banned dual pricing at the start of 2022

They had to do a similar thing with car insurance by not quoting female drivers lower be aude they were female.

Result was women drivers got higher quotes.

 

I think the important metric with insurance is when it comes to paying out. Don't matter a (expletive deleted) if you pay 100 or 1000 a year, if they don't settle a claim adequately, the customer has been conned/scammed.

[saveasteading]

I was very surprised when Churchill said they were not offering renewal. 

Because of a relatively small claim?

Shame, as their customer service was exemplary.  Ie they answered phones and had real people.

So it now seems more likely that it was a takeover thing. These good people are probably gone.

 

As I've mentioned before, an insurance manager proudly boasted that they had the lowest payouts in the world (40% of income I recall). They spent a lot on resisting and refusing claims.  

So I agree that we need to know this as well as the cheapest quote. That's where "Which" ratings must be worth a look.

[-rick-]

Just now, saveasteading said:

I was very surprised when Churchill said they were not offering renewal. 

Because of a relatively small claim?

Shame, as their customer service was exemplary.  Ie they answered phones and had real people.

So it now seems more likely that it was a takeover thing. These good people are probably gone.

 

Sorry, maybe I'm reading this wrong. You mean they refused renewal for you?

 

Just now, saveasteading said:

So I agree that we need to know this as well as the cheapest quote. That's where "Which" ratings must be worth a look.

 

Yeh, I've never chosen the cheapest for things like this. Good company reasonably priced is what I go for.

 

With Aviva buying out all the highstreet names (Barclays, M+S, Churchill, Direct Line), what will be left that's reasonably priced but also pays claims? We'll end up with sharp operators or high priced options.

[saveasteading]

1 minute ago, -rick- said:

they refused renewal for you?

Yes. Over what was prob a £2k claim ( I don't know because they handled it all). 

I'm now with Allianz which came top in 3 different comparisons... yet strangely variable between them.  They don't ask the right questions.

[gaz_moose]

all the different 'insurers' are just brokers. There are actually only a handful of insurance underwriters and they basically run at a loss, They make their money from investing the money everyone pays into stocks, assets etc.. and that side of it makes they money. Its all just a probability game. 

[-rick-]

9 minutes ago, gaz_moose said:

There are actually only a handful of insurance underwriters and they basically run at a loss, They make their money from investing the money everyone pays into stocks, assets etc.. and that side of it makes they money. Its all just a probability game. 

 

I'm not sure what you mean by they run at a loss, but then they make money from investing the premium. Isn't that the whole business? Insurance hasn't been purely pooling risk for ages its a risk pooling + investment business. You don't have one without the other. I also didn't think all claims went to the underwriters. The underwriters only stepping in if the primary business lacked funds to pay claims?