Action by the members of the British Insurance Brokers’ Association and the Association of British Insurers is bearing fruit for long-standing motor and home insurance customers, according to a report published by BIBA today.
The response to a joint ABI/BIBA initiative designed to address excessive differences between new customer premiums and renewal premiums has, BIBA says, been positive, with brokers and insurers working together in the best interests of customers on renewal pricing.
The two organisations launched their set of Guiding Principles and Action Points in response to complaints from long-standing customers in motor and home insurance that they were being unfairly penalised at renewal.
According to the joint follow-up survey, brokers report a positive approach from insurers with premium capping systems in place and some dual pricing approaches ended entirely. Some systems brokers have reportedly adopted to implement GPAPs are said to be aimed at more vulnerable customers.
Steve White BIBA CEO said: “Our members have embraced GPAPs and this is benefiting home and motor customers. In light of the success of this voluntary action by both brokers and insurers it is clear that the Financial Conduct Authority needs to note the positive impact of GPAPs.
“Brokers offer a holistic approach to their clients’ insurances considering the breadth of cover under a policy and the claims-paying history of the insurer before considering whether switching to obtain a financial saving is in the customer’s best interests. This care negates the need for auto switching which might instead cause customer harm.
“All customers are different and sometimes the safety net offered by an auto renewal process ensures continuance of motor insurance, required by law or home buildings insurance often necessary under a mortgage and the practice should be allowed to continue albeit on an opt-in basis.”
YOU MIGHT ALSO LIKE