There surely has to be other players who have an older book that needs an overhaul 

By content director Saxon East

Saga has suffered a damaging blowback from the FCA’s renewals crackdown, but why haven’t other players reported troubles? 

That is the question people are asking themselves today following Saga’s huge loss and shake-up in renewals strategy.

To unpick this, let’s start with Saga. Saga was one of the most exposed as soon as the FCA blew the whistle on renewals.

It targets older policyholders who are most likely to remain loyal, so anything that increases churn is going to be most damaging to their business.

I stock upset customer

There is talk that insurers and brokers, as well as renewals, will soon face a huge FCA crackdown on access to insurance as it drops the soft touch approach 

But Saga can’t be the only one with older policyholders on their books, why haven’t others taken impairment charges and shaken up their renewals strategy? 

There is a distinct possibility that the market is being slow to catch up here, with some players being wilfully blind in tackling the problems.

The FCA probe, which examined 18 insurers and brokers in total, found widespread slack pricing behaviour and controls. Have they all suddenly cleaned up their act?

It’s doubtful. Aviva and RSA have released some fresh renewal plans, but there’s surely more to come out the woodwork. 

As for Saga, market watchers believe it is being very brave with its three-year fixed premium strategy.

With claims inflation rising faster than premiums, and potentially getting worse if the pound drops further and inflates the cost of imported car parts, Saga could find itself on the wrong side of some very nasty combined ratio numbers.

Great for the customer, well done Saga. But investors, currently licking their wounds with a 30% drop in share price, might have other things to say about it at some point. 

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