There’s currently a huge range of insurance discounts available to homeowners – 50% off if you buy now, 25% off for purchasing online, free contents cover when you buy alongside buildings insurance - it seems almost too good to be true for some customers... usually the ones who are too busy looking at the ‘SAVE’ signs and not the small print. So what happens when the discount ends?
Scott Fynn, head of marketing at Select & Protect, said: “In many cases, these up front discounts being offered can be a little like rose tinted glasses. Customers think they’re getting a fantastic deal when in fact, they’ll probably end up paying for it in the long term, usually at anniversary.”
Fynn continued: “The fact that Aggregators do not directly involve themselves in the renewal process - their model being more focussed on acquisition - we can all appreciate the customers’ keen interest in receiving low premiums based on up front discounts and incentives. What worries us is the potential to recoup these discounts at renewal. Clearly a broker driven model provides a much more respective balance between advice, premium and value, over and above short term discounting tactics. In fact we have seen some of these tactics being used in the broker market but most are short lived and we err on the side of caution to brokers switching on to such propositions.
“The most important thing is to ensure brokers are aware of the various discounts available on the policies they’re quoting for. Many customers and some brokers do not realise the numerous discounts for new business. So it’s important to keep up to date with these so as to mitigate the “switching” culture that is starting to materialise. Front end discounts and the attraction of incentives via direct channels are all well and good for year one, but a true discount offers value to the customer throughout the lifetime of the policy.”
