I tried other insurers but they were charging even more.
None of it made sense. It seemed I was up against a wall; a wall which somehow managed to ensure that customers couldn’t move to the competition, while at the same time penalizing them for not moving over to the competition.
So I did a bit of reading about it. Dual pricing, also referred to as differential pricing, is a term used to describe when insurance companies charge new and existing customers different premiums, despite the fact they have similar risk profiles.
This apparently occurs most often where an insurer charges a new customer significantly less than a customer who is renewing an existing policy. In fact, it seems, the renewal customer can often pay what has become known as a ‘loyalty premium’ for not seeking out competition elsewhere.
However, as I discovered, there are other pricing practices. One of these is called ‘price walking’. Here insurers actually increase premiums incrementally each year for existing customers come renewal time.
This whole situation is under review by the Central Bank. Publication of findings is expected to come in the second half of this year — if that now happens, of course, given the brakes that have been put on everything by the pandemic.
The practice of dual pricing has been known about for a long time but nothing has been done about it.
And, it’s believed, consumers won’t experience any improvement in the market until appropriate legislation is drawn up and passed by the government. Such legislation would ensure consumers are not being charged extra for simply being a loyal customer, for example. Because these firms target customers who may not be prone to switching regularly.
I have not switched insurer for a few years.
But believe me, that’s gonna change.