Insurance Loyalty Is Penalised

chalkborad with loyalty equals hiugher prices

When your loyalty is penalised your renewal will cost you more!

In 2018, 6 million loyal policy holders would have saved £1.2 billion if they had paid even the average price for their risk.

The Financial Conduct Authority (FCA) announced that it will implement new rules to improve competition and protect loyal customers buying home and motor insurance – known as ‘loyalty penalties’.

Firms love loyal customers, and many firms increase the costs to those who are least likely to go to a competitor. In addition they temp you by charging lower prices for new customers but do not pass those on to loyal customers.

The FCA’s research in September 2020 that MILLIONS of home and motor insurance customers lose out if they stay with their current providers.

They found that many firms:

  • Offer below-cost prices to attract you as a new customer.
  • Use sophisticated processes to assess your loyalty and likelihood not to switch,
  • Target those cohorts or people,
  • increase prices for loyal customers each year at renewal – ‘Price Walking’.
  • Keep the best deals for ‘new’ customers,
  • Therefore loyal customers pay more in the long-term.


This is also a risk for affinity customers and why we believe in competition and fair, transparent prices.

The FCA’s new loyalty penalty rules:

  • Will stop firms price walking.
  • Will stop firms offering unsustainable low-priced deals to some customers.
  • Should improve competition overall and make the market work better.
  • Save you money in the long run!

The FCA estimates collectively you, the customer, will save £4.2 billion over 10 years.

Sheldon Mills, Executive Director, Consumers and Competition at the FCA commented on the new rules:

‘These measures will put an end to the very high prices paid by many loyal customers. Consumers can still benefit from shopping around or negotiating with their current provider – but won’t be charged more at renewal just for being an existing customer.’

Services Family Insurance was founded to improve competition and level the playing field for all.


Member of the Military? Then, YOUR LOYALTY MAY BE BEING PENALISED – get a military kit and contents quote

We’re a new business competing with established insurers.

More than one of our customers has saved over 40% on their military kit & contents premiums by switching to us and despite the fact that we don’t offer ‘new customer deals’. We support the Armed Forces and the Covenant and keep things straight.

Why you should swop.

Read the full FCA report.