Monday, February 10, 2014

Dear Insurance Companies...

If you send me a renewal notice saying that you believe the most appropriate provider for me gives a quote of £X a year and I phone to cancel saying I've got a much better quote (as I had), please don't put me on hold while you rustle up a mysterious 'new' quote at £Y per year for the same service. I'm not, despite appearances, a complete idiot - so, by all means, consider that £X-Y an "apathy tax"... just don't be surprised if I elect not to pay it.

(It was especially insulting this time, as I happened to have not one but two much better quotes for the insurance, one of which was actually that same £Y quote from the same provider. It just happened that I'd been quoted as new business rather than as a renewal.)

Actually, this whole episode makes me feel really quite distressed, precisely because it's not, at all, a surprise. It's well known that companies delight in offering "introductory discounts" and other such things in order to get your business, and then ramp up the costs on renewal. In effect, you'll always be better off moving your gas/electricity/internet from your current supplier to someone else.

It's especially bad with insurance, which is supposed to be marketed based on actuarial assessment; that is, based on a calculation of the risk involved. But, as I've said before, if it were really done based on a purely actuarial basis, it should always be cheaper to renew with the same company than it is to move, because the new company has actual rather, than estimated, data which reduces the unknown factors, and hence the risk. And yet it is always cheaper to move elsewhere... or at least to say you're going to move elsewhere.

I do hate it when things just don't work the way they really should.

No comments: