Loyal customers are losing out as home insurers focus on attracting new clientele at the expense of existing customers, according to a recent report by financial research company Defaqto.
Named '
Home Insurance in the UK' the Defaqto report criticised many home insurance providers for neglecting to focus on improving service for customers and instead launching a price war in order to gain new business.
Existing customers lose out on the benefits of the numerous price reductions and deals created by the insurance providers as their own policies maintain the same prices as when they signed.
"It hardly seems in keeping with the FSA's (Financial Services Authority's) rules for treating customers fairly that two customers with exactly the same risks should pay markedly differing amounts for their policies," said Brian Brown, author of Defaqto's report, to Reuters.
The increasing use of the internet has popularised easy and fast deals to attract customers, with new online clients being able to earn over £100 in cash-back from certain sites.
Price comparison sites are another online driver of recent price wars amongst insurers.
But Mr Brown also added that environmentalism would find its way into the
home insurance market, as insurers look to appeal to potential customers in ways other than through price reductions.
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