Car, home and travel insurers could soon be forced to spell out to customers how much they paid for cover last year in renewal letters sent when their policies are about to expire.

The proposals announced today by the regulator, the Financial Conduct Authority (FCA), follow concerns that loyal customers end up paying higher prices than new customers.

And as many home and motor insurance policies renew automatically, it can mean the elderly or vulnerable pay more than in the previous year, says the FCA.

Further, the proposals come after a survey of 300,000 people in 2014 found that including the previous year's price on renewal notices prompted between 11% and 18% more people to switch providers or negotiate a lower price – especially where premiums increased sharply.

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.

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. See's Insurance guides to slash £100s off your renewal quotes.

What exactly is the FCA proposing?

The proposals don't necessarily mean renewing customers will get the best deal. But, in addition to insurers including details of the previous year's premium on renewal notices, the FCA is also proposing the following:

  • For firms to identify consumers who have renewed the same product four times or more to give them more information so they can check if they're getting the best deal.
  • Guidance on how firms can improve their processes around renewals to deliver greater clarity and better outcomes for consumers.
  • Guidance that firms maintain records of past premiums.

The FCA expects its proposals, which will apply to home, motor, travel, pet and health insurance, to go ahead although they're out for consultation until 4 March 2016. Once approved, the regulator expects firms to incorporate the new guidance within six to 18 months.

Insurers may soon be forced to reveal how much you paid last year in renewal letters
Renewal notices could soon include details of the price paid last year

'Our message is: never auto-renew' founder Martin Lewis has blogged on the need to End car insurers' auto-renewal rip-off and listed 10 rule changes needed, including giving customers the choice of opting in or out of auto-renewal when the policy is bought and calling for information on the previous year's price to be prominently displayed on renewal forms.

Johanna Gornitzki, insurance and money editor at, says: "It's great to see that, at last, insurers may soon have to display last year's prices so that existing customers can clearly see how much more they would have to pay if they decide to stay with their current provider.

"Hopefully this will bring home the message that loyalty can be expensive. However, the FCA could go one step further by also telling insurers to list details of claims in renewal letters so customers are armed with all the information they need to compare prices elsewhere.

"Our message is: never auto-renew. If your renewal is coming up, jot it in your diary to remember it. Compare comparison sites and then call your insurer to see if it can match, or even beat, the best quote you found. If it can, you're quids in."

Aren't some insurers already doing this?

Earlier this year, Axa became the first major insurer to include previous insurance premiums on renewal notices. We've asked other major insurers Aviva, Churchill, Direct Line, LV and More Than whether they plan to do the same, sooner than the FCA's intervention in the industry.

Aviva says customers registered with MyAviva (online account) or via the MyAviva app can see their current premiums all year round, including when they get renewal reminders. But those who receive printed renewal documents don't currently see the price they paid. Aviva adds it's been working towards this but no time-frame was given.

More Than says it is "working towards showing last year's premiums" though it couldn't give a definitive answer of when it's likely to do this, while LV says it will "introduce this in the future, once we've received final guidance from the FCA".

Direct Line Group, which includes Churchill and Privilege, says it will "take time to meet the requirements from a technical point of view" but adds it "will work out the best way to apply the changes needed with minimal risk to customer data and to the business".

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