uSwitch has said that is disappointed that insurers do not have to start publishing details of policyholders’ previous year’s premiums on their renewal notices until next April.
The FCA has published a policy statement on increasing transparency and engagement in general insurance markets which requires insurance companies to disclose last year’s premium at each renewal.
However, the price comparison service has said that the delay in implementing the rule will hurt customers.
Rod Jones, an insurance expert at uSwitch.com, said: “This is great news for customers, as most are unlikely to remember what they paid last year – making it impossible to know if their renewal is a good deal.
“We applaud the likes of AXA who have lead the way by already providing this renewal information but we are disappointed that this rule change won’t come into effect until April 2017, as many insurers and brokers will wait until the last minute before implementing it.”
The ABI also expressed disappointment, over the decision to include health and pet insurance products.
The body said that it was concerned that their inclusion could lead to “confusing and contradictory” messaging on some renewal notices.
James Bridge, ABI assistant director for conduct regulation, said: “It is positive news for customers that the FCA has taken on the ABI’s proposal for firms to disclose last year’s insurance premium at renewal. Showing this information should help customers better understand what they are being offered and decide whether to shop around or stay with their existing provider.
“We are disappointed, however, that the FCA has not taken our advice to exclude health and pet insurance products, as we are concerned that the broader application of these measures may lead to confusing and contradictory messaging on some renewal notices.
“Since only a third of insurance policies are bought directly through an insurer, it’s important that the FCA is implementing this across the market to include brokers and intermediaries.”
The FCA’s policy statement comes after it released a consultation on the matter of renewal notices late last year. The consultation received 113 responses which prompted the FCA to make four adjustments to its original proposals.
The first is that firms must give an annualised premium reflecting any mid-term adjustments, instead of just last year’s premium if a consumer’s circumstances change.
The second is an alteration to the shopping around disclosure that firms must provide, so that consumers are encouraged to consider cover when shopping around as well as price. The third is to bring ten month policies into scope to reduce the risk of some firms avoiding the proposals.
The fourth amendment, which has irked uSwirtch, is to extend the proposed implementation deadline by three months. It said that this would ensure that all parts of industry had enough time to roll out the new renewal notice requirements.