Admiral admits insurance customers may have been misled on renewal

ADMIRAL has been forced to admit that some people who renewed their insurance policies with the insurer may have been misled, breaking new rules from the City watchdog to tackle an industry-wide problem.

In its first action since introducing the rules in April, the Financial Conduct Authority (FCA) said the insurer may have given “inaccurate information in renewal documents” by publishing an inflated version of the previous year’s quote, which did not take into account discounts the customer actually enjoyed.

As a result, customers may have thought they were getting a better deal on their renewal and so were less inclined to shop around for another policy. Insurers have come under fire for punishing loyal customers with higher premiums. Companies typically keep their cheapest rates to lure in new customers, with The Daily Telegraph revealing earlier this year that Direct Line quoted a customer of 24 years around £1,000 for cover on a four-bedroom house, but offered the same cover for just £194 to a new buyer.

The aim of the new rules is that customers will be able to spot when they are being exploited and start shopping around. The FCA said it “has seen good practice but some concerning examples” and is currently assessing insurers. The FCA said Admiral had agreed to contact those who renewed their policies after April 1, giving them the chance to switch to another insurer without a penalty.

Ian Hughes, the chief executive of market research agency Consumer Intelligence, said it was concerning that barely two months into the new era “already there are problems with the likelihood of more to come”.

A spokesman for Admiral said the group was “committed to offering fair and transparent pricing” to consumers, adding that “we apologise for any confusion or inconvenience caused to customers who received an inaccurate renewal document”.