Insurance firm AXA has announced that its policy renewal letters will soon not only include a quote for the upcoming year, but remind policyholders how much they paid for cover in the last year.
The practice of displaying the previous premium will be introduced first to home insurance customers from June and direct business insurance renewals in July.
Car insurance customers are already benefitting from the change, and AXA says that the response has been positive.
Why this is a good thing
Generally insurers don't include the last year's premium cost when they write to you about renewing. There's a simple reason for that - your renewal quote is almost always more expensive. By not explicitly saying that you will pay more, you're more likely to simply renew rather than shop around to see if you can get a better deal.
So AXA should be applauded for this change, which will help policyholders to compare deals properly. Yves Masson, CEO of AXA's direct and partnerships business, said that this move would provide transparency for customers. He said: "It is a key factor in building trust, which has been all too sadly lacking in our industry in the past".
Of course, there is more to shopping around than simply the headline price. You need to ensure you are comparing policies with the same level of cover, what the excess levels are and whether there are any differences between exactly what is included as part of the policy.
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