Insurance 'breakthrough': car insurer promises to tell you how much you paid last year when you renew

The Telegraph

It's a damning indictment of the insurance industry that when it comes to issuing a renewal quote for car or home insurance, few if any insurers remind customers how much they paid the previous year. 

The renewal quote lands on your doormat saying that next year's cover will cost, say, £700. 

Is that good value? Who knows – because without digging out last year's quote, you don't know whether this new quote represents an increase of 5pc or 50pc. 

But now, we have a breakthrough moment. 

Axa has become the first insurer to tell customers how much they have spent on their previous year’s motor cover when it issues new quotes for renewal. 

The insurer said it would display the previous year’s premium on renewal letters for home cover from next month and all direct business customers from July. The changes also apply to customers of Switcover, a subsidiary of Axa. 

It said the move would help customers "easily compare renewal prices when making their decisions about cover for the coming year. This action is part of a drive towards greater transparency, designed to create deeper levels of trust and loyalty." 

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Yves Masson at Axa said: "We believe that being more transparent with the information we provide will help customers make the right purchasing decisions. It’s a key factor in building trust, which has been all too sadly lacking in our industry in the past." 

But this move by Axa could shake up the industry and is definitely welcome, if long overdue. 

Matt Oliver, car insurance spokesman at Gocompare.com, said that insurers putting last year's premium on renewal documents was "good news for drivers" and "a positive step towards making the insurance industry more transparent and competitive". 

He said: "We've been saying for years that loyalty doesn't pay when it comes to insurance, with the best deals typically offered to new customers, not those who renew. If insurers choose to display last year's premium at renewal it doesn't change the fact that, regardless of what premium you're offered, getting online and comparing prices and policy details from other insurers should be your first thought when you see your renewal letter."