Admiral’s example should be followed by insurers
ONE OF the few pieces of good financial news during the devastating Covid-19 pandemic is the reduction in motor premiums. Full marks should be awarded to Admiral which moves closer to the front of consumer-friendly insurers.
The firm realised that far fewer miles were being travelled during the coronavirus lockdown and as a result claims fell significantly. Instead of pocketing all the benefit, it took the initiative of refunding £25 for each of the 4.4 million cars and vans it insures.
Besides the Admiral brand, this benefits its other trading names from Bell Direct and Diamond to Elephant and Gladiator.
Unlike airline and rail companies with their tortuous claims procedures, Admiral automatically credited all its customers online or, where necessary, by cheque. This alone should be a case study to the likes of LNER and Ryanair.
Admiral was founded in 1991. It secured a stock market listing in 2004 and is now the 62nd most capitalised company. Not only did it reimburse £110m but made price cuts worth £80m for NHS and community workers.
Other insurers have responded in lacklustre fashion. Some have preferred to keep their heads down but a few have said they will consider applications from customers. They include Aviva, Direct Line, Esure and even mutuals like LV=.
There is no certainty in their messages. There is a cloud rather than an assurance that a rebate will be given.
Instead of an automatic credit, they are effectively putting the onus on the policyholder.
One concession offered by a few motor insurers is to waive the administration charge for amending a policy. Most policyholders will be unaware there is such a sting but it has been withdrawn by Hastings and LV=. Direct Line has no such fee but Esure is still imposing £26.
Aviva considers itself magnanimous for not charging where a policyholder advises its mileage will fall.