News, Culture & Society

Why loyalty to your insurer gets you nowhere

The multi-billion pound insurance industry, which ridiculously badges itself as a national success story, is discriminating against millions of loyal customers in the relentless pursuit of new business.

A major probe into the seedy world of insurance by The Mail on Sunday, based on the views of hundreds of readers, shows widespread disillusionment among many former longstanding customers of some of the biggest insurance brands in the country.

Customers who until recently have religiously stuck with their insurer through thick and thin believe their loyalty over the years has been abused. 

Our probe, based on the views of hundreds of readers, shows widespread disillusionment among many former longstanding customers of some of the biggest insurance brands

They are angered by the fact that the cover they have or had – typically home or car insurance – is being routinely offered by their insurer to new customers at a far cheaper price.

They are also annoyed that some of the worst offenders are firms marketing themselves as elderly friendly, such as Rias and Saga, which sell cover to the over-50s.

Though a rising number of people are now wise to the anti-loyalty stance adopted by most insurers and either shop around at renewal or bargain with their provider, they remain aghast that companies are not interested in rewarding loyalty. 

Some customers – such as Steve Taylor (see box) – now rotate their insurance providers so as to extract the keenest priced premiums.

James Daley, a consumer champion at website Fairer Finance, says our analysis highlights the ‘dysfunctionality’ of the insurance market and confirms the need for a major overhaul of its practices.

Recent regulatory action, he says, has been directed at encouraging customers to shop around more for insurance. Although welcome, he fears that those customers who remain loyal – either through a sense of duty or inertia – will be discriminated against more than ever.


Strategy: Steve Taylor with his Aston Martin DBS and classic Jaguar SS 100

Strategy: Steve Taylor with his Aston Martin DBS and classic Jaguar SS 100

As a management consultant, Steve Taylor saw with his own eyes the money firms waste soliciting new business through the front door – while leaving the back door open for rivals to poach their customers.

Steve, now retired, has witnessed staff being incentivised to sell while no encouragement was given to provide an adequate service to loyal customers. The insurance industry, he says, is among the worst in this regard and has failed to learn the lesson that it is far more cost effective to retain rather than recruit customers.

It is why Steve, 61, always shops around for car insurance for his three cars – a Jaguar SS 100, an Aston Martin DBS and a Range Rover Vogue SE.

Steve, from Orsett in Essex, says: ‘I have yet to find an insurer who is prepared to cover my three cars on a single policy. As a result I have three separate policies.

‘My approach is to find an acceptable insurer for each vehicle. Then on renewal I invariably switch. In year three, I switch again, usually back to my first insurer, which has all my details, and tends to offer a premium close to what I paid first time around.

‘In year four, I revert to the insurer in year two. It is an approach I find works well and keeps costs under control.’

For example, with his Range Rover Vogue, Steve was insured with Saga in 2014, then Privilege a year later before going back to Saga last year.

On the Aston DBS, he has rotated between insurers Saga, Admiral and Flux. He is currently with Admiral.

‘Loyalty just does not pay,’ he says.


Insurance costs are on the rise generally, a result of tax hikes (insurance premium tax) and, in the case of car cover, Government changes that have resulted in insurers paying out more for personal injury claims.

Experts state motor premiums are rising on average by between 11 per cent (Association of British Insurers) and 18 per cent (comparison website Confused). 

Increases for home cover are gentler, at seven per cent. But these averages hide some shocking rises insurers are trying to pass on to longstanding customers, who are usually elderly.

Dennis Herbert is a retired train driver from Tyseley, Birmingham. Now aged 83, he is proud of the fact that in 65 years of driving he has never made an insurance claim.

For the past 35 years he has tootled around in a Mini Clubman Estate, a car that regularly draws admiration from people in the street who want to buy it.

He says: ‘Nobody apart from myself and when it goes in for an MOT has ever put a spanner on it.’

Despite Dennis’s exemplary driving record and the fact he drives no more than 250 miles a year – a result of having to care for his wife who is stricken with Alzheimer’s – his longstanding insurer LV= took a different view.

In May it quoted him £456 to renew his cover – a jump of nearly 19 per cent on the year before and an increase over two years in excess of 25 per cent.

Annoyed, he rang LV= to see if he could get the quote reduced but it refused to budge. So he went to classic car specialist Lancaster Insurance which offered him equivalent cover for £255.

Pleased with his success, he challenged his home insurer Co-op Insurance when his policy came up for renewal. 

Despite being with the Co-op since 1968 when he bought his house, it wanted to increase his premium 19 per cent to £238. Again, when it refused to reduce the quote, he found alternative cover with the Post Office for £197 – less than he had paid the Co-op last year.

Dennis says: ‘My years of loyalty meant nothing to either Co-op or LV=. Changing providers was a bit daunting at my age, but I was not going to have my finances impaired by inflated insurance premiums.’


A number of insurers market themselves as being elderly friendly or catering for a specific profession. But this does not mean customers get a fair deal. Far from it. 

Retired police officer Brian Hodgson has always trusted Police Mutual for insurance. It was set up nearly 100 years ago to look after the financial welfare of police officers, serving and retired. 

But when he recently received notice of sharp premium increases for both his home and car insurance, he decided enough was enough. Having never made a claim in more than 50 years of being with the insurer, he made enquiries elsewhere and found cheaper cover. 

Now aged 82, Brian – from Whickham in Durham – feels as if he has been exploited. ‘All the time I thought I was being treated favourably when I was not,’ he says. ‘Shame on them for failing to reward my loyalty.’

He is not a lone voice. A recent letter in the magazine for members of the National Association of Retired Police Officers raised similar concerns about officers thinking they were getting special deals when they were not. ‘Buyer beware,’ it warned.

Readers have also complained about big price hikes at over-50s insurers Saga and Rias. John Todman, who has been with Saga for 15 years, was shocked to be told his car insurance premium would increase nearly 52 per cent this month. 

When he contacted Saga, he was told the increase was a general rise throughout the insurance industry.

John, from Salisbury in Wiltshire, has now found cover cheaper than he had been paying with Saga. ‘It is irksome that 15 years of loyalty counts for nothing,’ he says.

Peter Smith, from Broadstairs in Kent, is angry about his treatment at the hands of Rias.

Aged 63, he is proud that he has a longstanding record of no claims on car insurance. When he bought a second car late last year – a Kia Sportage to complement his Kia Magentis – he asked Rias whether it did multi-car discounts. 

He was told no. The result was a quote for £993. If he paid monthly, he would have paid an effective surcharge of 24 per cent.

Shocked, he found cover a third of the price from LV=. Then when his Kia Magentis came up for renewal in May, he decided to move away from Rias, again in favour of LV=.

‘Rias seemed put out when I upped sticks,’ says Peter. ‘But it was a no brainer. I now have my two cars insured for a price less than it wanted to cover just my Magentis. Of course, loyalty should be rewarded but it is a word lost on insurers.’


When Pat McLaughlin’s car cover came up for renewal last month, he assumed all would be fine.

He had built up 11 years of no claims bonuses and had cut his mileage in his Seat Alhambra people carrier from 13,000 to 10,000 a year.

All seemed tickety-boo. Yet his insurer, Direct Line, was not interested. It declined him cover.

Bewildered, Pat, 66, who has retired after running a successful exhibitions firm, sought an explanation, only to be told that the underwriters ‘don’t like it’.

Bewildered: Pat McLaughlin could not renew

Bewildered: Pat McLaughlin could not renew

Subsequent phone calls got him no further, so he took out cover with A-Plan. 

Then, when his home insurance, also with Direct Line, on his house in Ringwood, Hampshire, came up for renewal this month, he took great pleasure in moving it, again to A-Plan.

‘The nice thing,’ he says, ‘is that now my wife and I have car and home insurance which costs us £60 a year less than last year.’


Insurers are now required by the regulator to provide policyholders with details of their existing premium when they give a renewal quote. It means customers can see the price hike they face without having to search for old paperwork.

Armed with the renewal notice, all policyholders should then use a comparison website – the likes of Confused and Gocompare – to see if they can find equivalent cover elsewhere at a cheaper price.

If they can – invariably policyholders will – they should go back to their existing insurer and ask if it is prepared to match or slightly undercut the price offered by the cheaper provider. Some firms will relent at this point. If they do not, move away.

This strategy is now employed by many policyholders, including Steve Lewis, a retired 64-year-old management consultant from Alvechurch in Worcestershire.

Steve, married to 59-year-old Jo, shops around for all his main household bills as a matter of course – home and car insurance, car breakdown cover, boiler breakdown insurance and gas and electricity supplier.

‘It’s simple,’ he says. ‘When cover comes up for renewal I compare it against rivals to see if I can get the same cheaper. 

‘I then ring my existing provider and ask whether it will reduce the renewal quote on the basis I am a valued customer.’ 

It is a strategy that pays off handsomely. After insuring the home with Castle Cover for five years, he moved this year to Legal & General saving £137 in the process – the L&G cover is also slightly better.

After 20 years of car breakdown cover with the RAC, he switched this year to the AA, paying £139 instead of the £191 the RAC wanted. On car insurance he stuck with Castle, but only after getting the original quote reduced from £332 to £290.

Steve says: ‘It took me many years to realise a phone call with a threat to move cover – or an actual move – could be so financially rewarding. I hope that with the advent of comparison websites and growing computer literacy fewer of the older generation will be milked dry.’

He would also like all renewal notices to be more transparent. Steve says: ‘The letter should state: ‘We’ve reviewed your claims history and length of time with us and this is the lowest quote we can offer. 

‘Please contact us ONLY if you want to renew your insurance. If you can find a lower quote elsewhere we are sorry to see you go’.’

Has your loyalty been abused by an insurer? Email: 


Why loyalty to your insurer gets you nowhere

We asked the industry to respond to our findings of widespread dysfunction in the market.

The Association of British Insurers said: ‘Insurance is a competitive market with many existing customers shopping around to get the right policy for their needs at the best price.

‘We recognise that no competitive market is perfect and relies on customers shopping around to get the best deal, including taking advantage of any introductory discounts.

‘We and our members want a market that operates in the best interests of customers. This is why we pushed for the changes brought in earlier this year by the regulator, such as showing the existing premium on renewal notices. This should encourage customers to review their cover and consider other deals.

‘We continue to work to support a market that remains competitive, with choice and transparency for both existing and new customers.

‘This includes engaging with the regulator as it continues to look at how the general market operates.’