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Renewal

When a customer’s policy is due for renewal, it allows them to assess whether they wish to continue with their current product and insurer. There could be many reasons to change cover, but mainly, from a customer’s perspective, you should consider whether the policy still meets their demands and needs, and whether it is still providing value.

A renewal also provides an insurer an opportunity to review the terms of cover and price for the customer, so these may change.

Changing terms

The introduction of the General Insurance Pricing Practices rules means that insurers will undertake reviews of all of their products annually. This could result in terms changing, with a view to ensuring the products continue to provide fair value for the intended target market. Product changes should be outlined to the customer.

Renewal notifications

It is important that renewal communications are clear, fair and not misleading. This means that the customer’s attention is drawn to:

  • Key requirements from the customer – such as the requirement to confirm the risk has not materially changed.
  • Changes to the product terms and conditions
  • The renewal premium, broken down if there are modular elements to the total price.

If renewal notices are not clear, fair and not misleading firms could be subject to a fine or action by the FCA. Lloyd’s banking group were fined £90 million for misleading renewal notices, it is essential ours do not mislead our customers.

Questions to ask

  • Is the renewal documentation clear, fair and not misleading?
  • Where a renewal is over the phone, has the key features and limitations of the policy been discussed with the customer?
  • Has the customer’s circumstance changed since they first took out the policy?
  • Does the policy still meet the demands and needs of the customer?

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