Axa is the first major insurer to announce that it will start telling customers how much they paid for their insurance premium in the previous year when sending out renewal notices.
The move by Axa, which owns Swiftcover, should mean customers are able to compare cover and prices more easily as they'll know exactly what they paid the previous year (see our Cheap Insurance section for more ways to compare and save).
At present, renewal notices simply give the new price of insuring your home or car for the upcoming year, plus any changes to the terms and conditions or any optional additions you can make to the cover. But they don't state the price customers paid a year earlier.
Axa says it's still "finalising plans" so no timeframe has yet been set for the rollout of the new renewal notices, although other news sources have reported that it will start at the end of this month.
We asked Axa which of its customers – home, car or other insurance users – will receive the revamped renewal notices and it said it was unable to give us this information.
While any changes that increase transparency in the insurance market are good news, Axa's move doesn't necessarily mean renewing customers will get the best deal.
Typically, when you get a new policy with the same company, it often costs more than buying the same cover elsewhere and our message is never to auto-renew – always compare prices, even before you expect to receive your renewal notice.
In March 2014 the Financial Conduct Authority (FCA) called for "more effective and smarter disclosure" of information to insurance customers by their provider to make sure consumers have the information to help them make better informed decisions, including at renewal time.
The regulator is looking into what information should be provided in insurance renewals and hopes to finish its research in the next few months, but says that it "encourages firms to develop innovative solutions that will benefit consumers in the meantime".
What about other insurers?
MoneySavingExpert.com asked the other major insurers whether they have plans to follow in Axa's steps. Here's what they told us:
- Aviva: "Aviva customers who are registered with MyAviva or the MyAviva app – our online self-service customer portals – are able to see their current premium all year round, including when they get their renewal reminder. Those customers who only receive our printed renewal documents do not currently see the previous year's premium. However this is something that we're working towards with the industry via the Association of British Insurers (ABI) and the Financial Conduct Authority (FCA)."
- Direct Line: "If the previous year's premium were to be placed on a renewal invite, it would be essential that consumers receive consistent information regardless of their choice of insurer. For instance, a significant number of customers make mid-term amendments to their policies, so the premium they were originally quoted the previous year may no longer be relevant. Other areas that would require a consistent approach are presenting the premium for monthly payers, and whether ancillary products are included."
- LV: "LV does provide clear details of this year's premium and product benefits well before renewal, so customers have time to make an informed choice based on our price, cover and service. Showing last year's premium doesn't necessarily enable customers to make a like-for-like comparison, as much can change during the year that impacts price, such as a change of car, drivers or address."
- More Than: "More Than, and its parent company RSA, is working closely with the insurance industry and the FCA to establish transparent industry-wide practice with regards to the presentation of customer's renewal information."