Dual pricing is wrong and makes insurers look like dodgy market traders. It’s time we stamped it out.

What’s the difference between insurers and Del Boy Trotter?

Not much, going by a recent edition of the BBC’s consumer affairs programme Watchdog. With the obvious exception that people find Del Boy lovable.

Watchdog on 12 April highlighted the problem of dual pricing in personal motor, with customers discussing how they’d been quoted much higher premiums for renewals than they could get as new customers.

Personal experience

It happened to me. My insurer doubled my premium at renewal – an increase of £1,000. I was a year older, and so was the car, since taking out the policy. But besides that, nothing else had changed.  

It seemed like a mistake, so I called my insurer to check. I was told that it wasn’t a mistake: that was the price.

As a result, my insurer lost out. I shopped around, found a cheaper price and moved to another insurer. And as it was a multi-car policy the insurer didn’t just lose the premium on one car – it lost out on all three.

Where’s the action?

This type of behaviour is madness and, as Watchdog has made clear, it’s all too common.

But then we knew that already. We all talk about dual pricing in personal and commercial lines and how it should stop but where’s the action? We get mealy-mouthed words of empathy from insurers that try to cover up the issue but that’s it.

Forcing customers to shop around

The public is not fooled by this. That’s why consumers believe that the insurance industry lags behind in rewarding loyalty.

For all the talk in the industry of wanting to be seen as professional, why act like a dodgy market traders and then act surprised when the public lumps you in with the likes of estate agents and politicians?

It’s no wonder that the latest Insurance Times research shows that 40% of the British public considers application fraud to be “totally unacceptable”. If the industry insists on acting like Del Boy, perhaps we shouldn’t be too shocked if the public follows suit.

After all, what message are we sending out to customers? That it’s worse to be loyal to your insurer than to shop around?

Dual pricing needs to end

The industry can’t afford to continue to turn a blind eye. Dual pricing needs to end, and we can all do something to help keep it in the public eye until something changes. After all, the new generation of web-savvy consumers think nothing of using it to shop around for the best price – or to post bad reviews of poor service online.

If an insurer can’t even decide the right price for a risk, just how long will it take before established players find themselves usurped by new entrants more in tune with what consumers want?

So let’s face up to the dual-pricing issue and deal with it. Then, instead of consumers who see car insurance as, at best, a grudge purchase, we’ll start seeing consumers who actually want to use our products and recommend them to their friends.

Now, wouldn’t that be lovely jubbly?

Jonathan Davey is managing director of Keychoice

Twitter: @KC_JonathanD