Guiding Principles and Action Points for General Insurance PricingIntr - PDF document

1 Guiding Principles and Action Points for
Guiding Principles and Action Points for General Insurance PricingIntroductionThere are a wide range of risk factors that can lead to a change in the premiumquoted to customers at on disclosure of last year’s price at renewal. It is essential that all market participants meet these requirements in full. ABI and BIBA members will take action so thcustomerstendencyto shop around at renewal is not used to lead to excessive pricing differencesthat unfairly penalise longstanding customersThe ethos and approach to better outcomes for longstanding customers will be given Board or senior These Guiding Principles and ction oints apply to personal lines eneral nsurance products with contract terms of 10 months or longer, except pet and private health insurance products, where different market conditions mean they are not applicable. Action Points Where ABI and BIBA membershave animpact on the final premium paid by customers for eneral nsurance products they should evidence how they are taking steps to address excessive differences between new customer premiums and subsequent renewal premiums that unfairly penalise longstanding customersThis will vary between firms in line with their customer basebusiness models and pricing strategies and any actions they may alreadyhave taken.Thesupporting Action Poi

2 nts to the Guiding Principlesabove inclu
nts to the Guiding Principlesabove includeABI and BIBA members shouldmake clear in written, online or verbal customer communications that the new customer emium only applies for that year and subsequent renewalemiums may be higher. ABI and BIBA memberswho impact the final premium paid by customers shouldreview thepricing approach for customers whohave been with them longer than five years and assess whether this approach delivers a fair outcomeABI memberswill actively review their customertendency to shop aroundin line with the existing ABI and BIBA Code for potentially vulnerable customers at renewalto ensureoutcomes forthese customerare carefully considered against the Guiding Principles.The ABI and BIBA will publish areport in no more than two years’ time that demonstrateshow ABI and BIBA members have sought to tackle excessive differences between new customeremiumssubsequent renewal premiumsthat unfairly penalise longstanding customersThe ABI and BIBA will not seek to defend cases where there are excessive differences betweennew customer premiums and subsequent renewal premiums that unfairly penalise longstanding customers.We would welcome the Financial Conduct Authority taking this industryled initiative into account when supervising general insurance pricing practices and in its current review into general insurance pricing.8 May 201