Aviva writing to customers after renewal transparency failing

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FCA review led to insurer being “made aware” of problems.

Aviva is emailing customers after failing to follow renewal transparency rules, Insurance Age can reveal.

The issue has stretched across annually renewable general insurance products, including home and motor.

The insurer admitted that on previous renewal invitation emails it had not shown last year’s premium in a clear enough way and had not given enough prominence to the shop around message.

FCA
The provider acknowledged it had been part of a market wide sample review by the Financial Conduct Authority (FCA) into the implementation of renewal transparency rules.

Aviva explained it was “made aware” that there were some areas where it had not interpreted the rules in the intended way.

However Aviva declined to put a figure on those affected or specify which sales channels were at fault.

Insurance Age had been contacted by a Quotemehappy motor policy holder.

The email to the customer read: “We’re writing to you to tell you that at your last renewal on XXXX we should have made some important information clearer in your renewal invitation email, as follows:

  1. We should have shown the price for this year alongside the price for last year in a clearer way
  2. Our reminder for you to shop around should have been more prominent”

Aviva also wrote that it was “sorry” to have “got this wrong”.

Contact
The insurer confirmed to Insurance Age that it was asking any customers who felt the incorrect format had influenced their decision to renew to get in touch to discuss the matter.

The FCA’s focus on renewal transparency in personal lines has been in the headlines for years.

It published proposals in 2015 and rules came into force in April 2017.

The watchdog issued a warning in October 2017 that firms were failing to follow the rules.

This April the regulator reiterated the need to follow the rules. It highlighted that not being properly transparent after a year was “simply unacceptable”.

And this October the FCA turned to the topic again.

Patchy
Chris Woolard, FCA board member and director of strategy and competition, struck an exasperated tone last month when discussing that it had found insurers were applying the regulation in a “patchy way” in home insurance.

“The rule change around last year’s premium is a pretty simple one as far as I am concerned,” he stated.

“It is certainly intended to be a very simple communication with the customer.

“The fact that in some cases this has got obscured is genuinely disappointing.”

A spokesperson for the FCA said the authority would not be commenting on the latest news regarding Aviva as “we do not comment on individual firms”.

Amended processes
An Aviva spokesperson said: “Following a review, we are aware that we have not interpreted all the renewal transparency rules in the way they were intended for some customers.

“We have amended our processes to ensure they meet the requirements going forward.”

The spokesperson stressed that premiums provided to customers were correct.

“We are contacting any customers who may have been impacted to apologise and provide the required information again in the correct format.”

Concluding: “We are committed to transparency around our pricing and giving our customers clear information, so they can make the right choice for their insurance cover.”

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