Home insurance and the cost of loyalty

Loyal home insurance customers who stick with the same provider for six years or more are driving the profits in the sector, analysis from Citizens Advice suggests. The charity said loyal customers are paying an average annual premium of £325 for their sixth year of insurance – nearly double that of new customers (£172). The latest research suggests that home insurance providers tend to make their profits from those customers who remain loyal for six years or more. But the Association of British Insurers (ABI) said that whether or not a firm makes a profit depends on “many factors” and companies have committed to review premiums charged to customers who have been with them for more than five years. It said after six years, a loyal customer could typically expect to have paid a total of £1,596 – £500 more than someone who spends every year as a new customer with their insurer, paying £1,032 on average.