Home insurers kick off price war in Britain

LONDON: Home insurers in the UK are penalising loyal consumers as they vie to pull in new business, according to a report. Financial research company Defaqto said that rather than trying to extend cover and improve services to existing customers, many home insurance providers have launched a price war in an attempt to win business. It found that insurers are increasingly offering large discounts and incentives to new customers, while continuing to charge the same prices to loyal ones. New customers can earn up to £125 by applying through cash-back websites. The average payout has risen some 60% in the last year, with homeowners typically receiving between £30 and £60. Brian Brown, author of the report, said the rise of price comparison sites is forcing insurers to offer larger discount schemes to the detriment of sound underwriting discipline. “It hardly seems in keeping with the Financial Services Authority’s rules for treating customers fairly that two customers with exactly the same risks should pay markedly differing amounts for their policies,” he said. “It would appear that increasingly loyalty never goes unpunished and rewards are only available for the disloyal.” — Reuters Defaqto also predicted that most major insurers would offer some form of ‘iCover’ — insurance for electronic downloaded information — within the next one to two years. Some insurers might also provide data recovery services as part of personal computer cover within the home insurance market. The research company added that environmentalism would also play a greater role in the home insurance market, with insurers looking at ways to encourage customers to be ‘greener’.

Source: http://www.economictimes.com/