Welcome to yet another episode of BCCS, Brolly Customer Case Studies!

(it's really the first)

Unfortunately, we all know someone who’s been screwed (or felt as such) by insurance before - they didn’t have their claim paid out; were automatically charged lots more than the previous year on renewal; or worse, had to sift through a policy wording 😱😱

Tale as old as time.

However, that’s not what insurance was always about. And it still isn’t. Before the negativity started, insurance had a good and clear purpose: taking the risk of something unpredictably awful happening and having to handle it, and transferring this risk to another party by paying a smaller, more predictable fee.

It's this predictability that gives us the freedom to take risks elsewhere! Not having to save up 10s of Ks in case something goes wrong and we need to fix it. Or being able, for example, to use that money that would otherwise be sitting in a bank waiting for a misfortune, to travel the world or make an investment.

Nowadays, many people feel like part of that freedom is gone, and that we have to save large sums of money to buy insurance and, possibly, pay to replace something in the likelihood of our claims not being paid out. There is some truth to that, and there are definitely some grim cases that showcase this perfectly.

Let's take a look at one of these cases. For obvious reasons, real names will not be used 😄

Case 1: Surprise premium increase!

One of our users, who we'll call... Jack Claimentine, was going about his day, like always, carefree, as the important things in his life were insured and he knew it. Until later that day, whilst at the supermarket shopping for dinner, he was flicking through his bank statement on his phone. His jaw dropped. Thankfully, into the shopping basket, filled mostly with salad and soft cheeses.

He could not believe what he was seeing. He had been charged practically double the amount he'd paid last year for his car insurance - double! A smug, self-satisfied 4-figure number was staring right back at him.

But how was this possible? Was there a mistake? He was the same person, driving the same car, safely as always, no claims made, only one year older. What could have happened?

He had fallen into the renewal trap ☠️😱

What is a renewal trap you ask? Well, renewals are very important to an insurer - it is predictable income with no additional acquisition costs. The customer is already in through the door, now it's just a matter of asking for money. But this time, his insurers 🤑 were banking on his inertia to make a quick buck!

Of course he had gotten an email, but it had slipped by him. It read like one of the classics:

“To make renewing your policy as easy as possible, we will automatically renew your policy with the information you have supplied.“

Easy is great! The thing is though, it’s also important to be fair. As a loyal customer, staying with his insurer one more year, did Jack Claimentine deserve this premium rise?

A fairer system would say: “Hold on, this year there's been a massive increase in your premium. We’re probably not competitive, and you should definitely look elsewhere”?!

Left to their own devices, still very much the same as 50 years ago, insurers have been competing with each other to the point where they lose money to acquire a customer, only make back that money back on future renewals. This loss-leading model led to the evolution of the inertia-driven, and seemingly unavoidable, renewal trap.

We don't think this is fair.

Brolly conducted a study earlier this year amongst our customer-base, and found that around two-thirds (64%) of British consumers are overpaying for their insurance because they fall into the renewal trap. On average, people were overpaying by £170 on their car insurance!

You can read more about this here or check these pieces in the Financial Times and Insurance Business UK.

How to escape the renewal trap?

Because the trap is already set up, it's crucial to shop around every year and, very likely, switch insurer. Another option is to speak with your existing insurer once you've shopped around and query any increases directly (as their model typically allows for a lively haggling session).

But want to escape the renewal trap...... for good?

Brolly knows your insurance. The app helps you to better manage everything in one place, learns about what you need, analyses the cover you have, and helps you to make better financial decisions.

We want to give you more control, so that you feel calmer and reassured that you're getting the best insurance out there, whilst re-gaining pressure hours and freeing up your time to focus on what really matters!

The reality is, nobody wants to spend time on insurance. Brolly is there to take this hassle off your hands, automatically tailoring insurance around your life.

Next time on BCCS, we'll cover a case study on the excess fee on a policy.

Stay tuned 😉