A fresh approach to insurance renewals

A year ago Bought By Many launched its first insurance products designed by our members for use by our members.

If you are one of the many thousands who have trusted us enough to buy one of our new Cat & Dog policies you will have experienced first-hand our completely reinvented customer journey. And we’re delighted that you like what you’ve seen - giving us a Net Promoter Score of 80 (this means that when asked how likely you are to recommend Bought By Many to a friend or family member, 84% of you scored us 9 or 10, out of 10), and your feedback earned us a feefo rating of 4.7 out of a maximum 5.0. We’re pretty pleased about this. We said that we would work hard to offer Better Insurance. For Everyone. and while we have a long way to go, it seems that our members think we are on the right track.

It is, I’d be the first to admit, much easier to wow new purchasers than it is claimants. And many have made this point by saying that they’d like to wait to see what we are like at the time of making a claim, before they rate us. The good news here is that, having launched a completely online claims option and, including claimants ratings in our very public feefo ratings our overall rating has remained at 4.7/5.0. Nice.

But I am not writing this article to pat ourselves on the back. I am instead ‘putting pen to paper’ to talk about a subject that is beginning to gain a lot of financial press coverage. Renewals.

A couple of weeks ago in The Sunday Times an anonymous actuary wrote in to say that the ‘well-known insurer’ that he/she worked for actively penalised loyal customers, otherwise they would make less money. This, sadly, isn’t an isolated company. I recently spoke with a member of the management team of a well-known insurance business who told me that they had used external consultants to look into this matter for them – and his business had concluded that the way to both maximise profitability and still attract new customers was to rely on the inertia of existing customers by charging them more than new customers. In fact this issue seems to be widespread with MoneySavingExpert.com listing the expense of loyalty as the fifth highest issue in car insurance costs. So this isn’t new news.

Here, at Bought By Many, we are embarrassed by these stories. We always knew that the insurance industry had a long way to go to become properly customer-centric, but it seems that the direction of travel is in reverse! So we’re taking a stance. We’re not sitting back and celebrating the first anniversary of the sale of our new cat & dog products, instead we are rising to this new challenge.

We will for each and every renewing policy make three, very public, commitments:

To explain:

1. Front and centre, we will not in any way penalise renewing customers. We love renewing customers, they’re our biggest fans - they’ve had a choice and they’ve come back for more. Why on earth would we want to upset them?
2. In the UK, it became law last April that all insurers have to show policyholders their previous year’s premium as well as the new premium, at the time of renewal (this is called Transparency in Insurance Renewals). We will, we think uniquely, go one step further – we won’t just be showing you what you paid us last year but we’ll also be giving you a breakdown of the increase (if there is one) to explain why it has been necessary to make an increased charge. We like to think of this as real transparency in insurance renewals.
3. In the past insurance used to be all about spreading claims across all policyholders - this being the core principle of insurance. Somewhere over the years this seems to have been watered down or even lost, with individual policyholders increasingly being penalised for their own claims, even if they weren’t to blame! So we think of our stance here as being back to the future – taking the best practices of the past and using them to create best insurance offerings of the here and now.

This is all new news, but our first renewing customers seem to be happy with it: 167 out of the first 170 have chosen to renew with us. We’re sure that our policyholders will tell us what they think. And our public feefo score will reflect this, so not-yet-policyholders will be able to see for themselves.

Through each and every move we make we remain committed to our mantra of Better Insurance. For Everyone.