It’s highway robbery!

I have recently received is one from a homeowner in North London. His insurer, Liverpool Victoria (LV), wanted to push up his home premium by more than 40 per cent to nearly £1,400.

He contacted it in the hope of negotiating a discount, but LV wasn’t for turning. Disappointed, he shopped around and found identical cover with Aviva – 63 per cent cheaper than his 2022 LV premium and a saving of nearly £770 on what LV wanted this year.

The question he asked me was to the point: ‘If Aviva can offer such a good deal, why can’t LV?’

It’s a tricky one and I’m not sure I have a definitive answer – other than the fact that pricing differs markedly across insurers, according to their claims experiences (on both a national and local level).

Also, insurers target specific segments of the market with attractive prices, while actively discouraging other demographic groups from whom they fear being hit with above average claims.

In recent years, all insurers have had to provide customers with details of the previous year’s premium on their renewal notice.

But it is time insurers gave more information – especially if a significant premium hike is involved.

Our story about car insurance price hikes in January

Surely, it is not beyond the capability of insurers to explain in a renewal notice why a premium is changing by a significant amount. So, if an increase in local crime is a trigger to increase someone’s home cover, the policyholder should be told. Equally, if the age of a car owner has pushed them into a higher premium bracket, they should be informed. Though this wouldn’t stop customers shopping around, it might help them understand why their premiums are increasing – and stop them getting infuriated.

I suggested this to the regulator – the Financial Conduct Authority (FCA) – earlier this year. At the time, it seemed receptive to the idea, though maybe it was just trying to placate me. Yet, the introduction of new FCA consumer duty rules later this year gives the regulator the perfect excuse to force insurers to be more transparent about premiums.

These rules will require financial companies to send out communications that customers can understand. I defy any insurer to defend the lack of information given to customers whose premiums have rocketed skywards, without rhyme or reason.