Finally, loyalty is rewarded

LONG-term customers are to be rewarded for their loyalty by insurance giant Aviva.

Company boss Mark Wilson has previously criticised the industry’s pricing model that rewards customers who switch every year, while those who do not see hikes to premiums.

He is now testing a scheme which gives loyal customers discounts that are not available to newcomers. A trial is being run with 50,000 people and has proved popular so far, with Aviva hoping to take it nationwide.

Wilson said: ‘ Rather than putting up premiums, we want to reward loyalty. It can change the market.’

The chief executive has spoken in the past about his desire to change how insurers treat customers, saying the race to get them to switch is not in their best interests. Last year he said: ‘The market is broken. I don’t like it and neither do our customers.’

The loyalty scheme update came as Aviva unveiled a 2pc rise in profits to £3.1bn and said it will return £500m to investors, with a share buy-back planned for this year. Another £600m has been set aside to buy smaller rivals, although most are likely to be outside the UK. The dividend was raised 18pc to 27.4p.

UK profits were up 13pc to £2.2bn, and Wilson said the success was partly due to Brexit, and was dismissive of the gloomy views of many other bosses. He added: ‘In the UK it was a strong year, which may be surprising to some doom and gloom merchants. During these uncertain times, we think there’s probably been a bit of a flight to quality.’

Shares yesterday rose 0.2pc, or 1p, to 508.6p.