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Not a moan really, I've made peace with it (plus my wife tends to do a bit more of the leg-work as she's more penny-conscious than me) but why do insurance companies do this?
Like clockwork, our renewal quote comes through and it's daft, almost an invitation to go elsewhere.
Other companies give us much lower quotes, current company won't match and at best will only slightly reduce quote by reducing or compromising cover.
So what's the business model here? Do they make more from the few customers that just can't be arsed shopping around and accept the higher quote? Or if we just suck it up and accept what appears to be an outrageous increase this year, will next year's increase be much less (i.e. are they just trying to transition us from a 'new customer' rate to a 'sustainable' rate?). If I knew it wouldn't go up again (other than inflation) then I'd almost be inclined to accept the higher quotes so we don't need to do this every year.
Or are the big price hikes just to disguise 'higher than inflation' creeping price hikes? I imagine there are only so many insurers so they accept a very high rotation in customers knowing that for every person who leaves, another will join?
Just curious I guess...
I don't know the answer but have wondered if there is actually an actuarial reason that people who are long-term customers feel more inclined to claim, or that they have now earn a better payout if they do claim? However having been around big companies long enough I would not be surprised if the person responsible for bringing in new customers has a target for which he is bonused that is about volume rather than profit, and the person responsible for existing customers has a target for profitability not retention. Those create nice stories to shareholders - we have brought in x thousand new customers this quarter, and increased profitability from repeat customers by y%.
I was surprised our house insurance fell signicantly this year, I've been with them a while and probably could get a better deal but the drop (>25%) was enough I didn't bother looking around. That could equally be that the manager there has a target for customer retention this year!
I see it as a tax on the lazy and disorganised. Those that can't be arsed to shop around and just let it renew because it's easy. I can't see any other reason with the availability of comparison sites these days that you can pull up the search from the previous year, check it and run it again. Really not much effort involved. I've also noticed the last couple of times that you can do all the "I don't want to renew" stuff online too now so you don't have to go through the pointless "let's see if we can match it" stuff on the phone.
Combined with, normally somewhere around £40 at least, cashback for new customers then a renewal would have to be a very attractive offer to make me stick with it.
Most people don't have the time or understanding to get quotes elsewhere. Simple as that
As covered on the other thread, we're with Aviva - and have been for a few years. Annual premium has gone up (and down) by only a couple of % each year, certainly below inflation. Each year the renewal letter has a phrase along the lines of "you've been with us a while so you might get a better quote elsewhere". When I've tried, it's all been the same or more.
House/contents insurance? 😩 just did this yesterday. Buildings insurance - easy! Contents made car insurance look super easy.
this was helpful. https://www.moneysavingexpert.com/insurance/home-insurance/
otherwise it was laborious filling in of the comparison sites and then picking my way through all the different thresholds for valuables and the various options. Eventually finding that the quote examples produced needed even more information before eventually turning out to be either inadequate or not much of a saving
i did have 2 good outcomes. Cheaper proper bicycle insurance over having them on my household contents policy. Plus an exploration of separate gadget and valuables insurance (neither helped).
in the end I used a revised proposal with my existing provider. A little cheaper than the renewal thanks to my changes.