The last month or so has seen me negotiating my way through the tortuous and, to my mind, somewhat deceitful renewal process for my private health insurance. With a deadline looming, both I and Prime Minister May have been locked in complex and rather wearying discussions over issues of immense importance to the future well-being of someone very close to my heart – me!

In the end I have concluded the process with ‘no deal’ and I go forward into the brave new world of the National Health Service without a backstop in sight and without my promised 25% loyalty bonus available to me had I chosen to continue with the plan.

Give Us Your Money

The renewal process is painful, surprisingly slow, and involves lots of conversations that I don’t really want to have – especially if there is a broker involved in the transaction who is attuned to every trick in the book to get me to renew – even to the point of ‘renewing’ a policy after I had already given precise written instructions to cancel!

In truth my premium levels didn’t rise that much this year but after reviewing the ton of insurances that I have I was pretty sure that this one would need to bite the dust. The call from the broker just prior to renewal was pretty predictable and resulted in a ‘let me have a look around the market to see what I can find’ conversation.

(Of course, we all know that the days of the genuinely independent broker are long gone and, in fact, the so-called market that the broker was researching consisted of precisely 3 companies with whom they had agencies – not exactly a wide choice of providers).

We’ve Sorted It Mr Longworth

Eureka!

After much to and froing with debates around benefit levels, excess, alternative therapies and travel insurance options (!) the answer came back that I would be well advised to stay with my current provider and by virtue of a bit of jiggery-pokery the premium has been reduced by £10 per month.

Was I OK to go ahead and renew?

No, I wasn’t! Had they not heard anything I had been saying or writing during this 3-week period. Its all too much money and I’m not doing it.

‘No problem Mr Longworth, we hear you loud and clear’.

We Have Negotiated a Loyalty Bonus of 25% Just for You

So, with 48 hours to go before renewal I am delighted to say that my insurer finally recognised just how important I am to them and a whopping 25% was chopped off the premium. This is a Loyalty Bonus only available because I am such a great customer (after just 2 years of being a policyholder – there’s recognition for you) and presumably this would now persuade me to renew.

Now, I will admit, that for many people the lure of a 25% discount would be sufficient to tip the scales and maybe to persuade them to renew. However, we all know that this is not a Loyalty Bonus – it’s a financial bribe concocted by the broker and insurer working together and which had always been available, but the preferred tactic was to screw me for as much money as possible in the first instance and see if they could get away with it.

I wonder how loud the howls of protest would be if the people involved in this financial sleight of hand were to buy a house for £100,000 only to find that they could have had the same house for only £75,000? Or maybe a holiday for £1500 that actually only costs £1125, or perhaps a theatre ticket for £50 but which was readily available at just £37.50.

And to add insult to injury we would make it clear that those who pay the lower price are somehow ‘loyal’ and therefore that makes those who pay the higher price are either ‘disloyal’ or maybe just plain stupid! Is it just me or is this somehow wrong?

Dual Pricing and Deception

In the ongoing FCA review of dual pricing we are focussed primarily on the higher charges levied on existing policyholders in order to tempt the new entrant. In my case the opposite was true. Slashing the price of renewal, presumably at the expense of ignorant newcomers who don’t know any better. Or worse still, the discounted price is actually available to everyone (so no worries about dual pricing then) but we sure aren’t going to tell you about it unless we have to.

We often proclaim the world of insurance as being a noble profession. One in which the sharing of risk ensures security for all and where a promise made is a promise kept. In respect of pricing at least I must beg to differ and it saddens me to think that we have fallen to such depths of deceptive behaviours to earn a buck and make a margin at the expense of our ‘loyal’ policyholders.

So, my plea is simple – for the ‘honest’ broker I beg you to actually be ‘honest’, and for the insurer who would no doubt claim to have integrity as a core value it’s time to live up to the hype. I wonder how quickly pricing policies would change if I rang the Sun newspaper, or contacted ‘Rip-Off Britain’, and explained how consumers renewing their policy with this company were being regularly overcharged to the tune of 33%.

(And before you ask – a discount of 25% on the gross price is equivalent to a 33% uplift on the net price!).

Is that the type of headline you would like to see about your business?