Bad Business

This post kind of sucks.

And the reason for that is because it’s a moan about my old employer who I literally waved goodbye to four months ago. It also sucks because I liked my old employer as a company and I still have a lot of good friends who work there.

So any Aviva friends reading, I’m sorry, genuinely for what follows, I’d also add that it isn’t just Aviva who are terrible at this, but every single insurance provider I’ve ever taken out a policy with. It’s absolutely endemic across the sector. 

What is it?

Insurance renewals…

I had (until tonight) a multicar policy with Aviva for mine and my wife’s cars. A cheap enough policy at just over £300 for the year fully comp. I took this out with Aviva partly through loyalty to my employer and party because it was a decent price.

But the problem with car insurance policies is for the most part in the first 12 months they are a loss leader for the provider. The aim is to get the footfall through the door in order to keep you there beyond the first 12 months when they then start to make a profit from you. They do this through the renewal process where you find that £300 odd yearly premium has now grown to £600 in my case tonight.

Yep, doubled. I’d add I’ve not had any claims in that time, not moved, not done anything to increase my risk to my insurer. So I’ve been rewarded for this loyalty by being asked to cough up double what I paid last year.

I’m not alone in this. Google car insurance renewals and you’ll find thousands of similar tales. The problem is insurers hope and pray you’ll not notice your renewal automatically kicks in at 12 months. At which point if you try to cancel you encounter hefty cancellation fees for your trouble. So for the insurer it’s a win win if they can keep you beyond the first 12 months. For you it’s a lose lose.

So the very first thing I’d urge you to do is never ever accept your renewal notice from an insurer. The chances are you are being screwed.

The second thing to do is to call the insurer and tell them you’ll be cancelling the policy. And this is where my issue is.

If I was running a business I’d want my customers to be repeat customers. I’d want to make a profit but ensure my customer felt like they were getting a decent enough deal as part of the arrangement. If customers left I’d want to do everything in my power to stop them from leaving. That’s just good business sense.

You’ll never stop everyone leaving but if you can even stop 10% that’s profit you keep with you and not with a competitor. 

My issue tonight when calling Aviva to cancel was not the call centre. The chap was polite, we talked about me being an ex Aviva employee. We talked about the weather (he is in Scotland – where storm Abigail is hitting). I explained I wanted to cancel the renewal, he was efficient and polite throughout. He asked the important question of why I was cancelling. So I tell him it’s practically double what I was paying before.

The response is ‘okay Mr Mancini I’ll get that cancelled for you’

No no no no no no no

I want you to fight to keep me as a customer Aviva. I don’t want you to let me walk out the door. This isn’t Pretty Woman, I’m not expecting to be wined and dined and beaten by your short fat friend as he calls me a hooker, but I am expecting you to at least meet me halfway a little bit on this. Where is the discussion to see what you can do to keep me? Where is the chat about maybe doing a new quote as a new customer to get a discount? 

There was none, and it leaves me feeling like Aviva don’t care enough to keep me. This makes me sad, and disappointed, and it makes me feel negative about the other products I still have with Aviva.

Because this is the silly mistake that Aviva as a composite life and pensions provider makes above and beyond your bog standard car insurance provider. They fail to use big data and joined up systems to spot the critical moments of truth with their customers. Moments of truth such as mine this evening with Aviva where if they did use analytics they’d have seen I also have home insurance and a pension with Aviva. Products which I’ll also now be cancelling and moving to someone else who values my entire relationship with them more.

Silly stuff like this sounds insignificant and in the grand scheme of things it probably is. I’m just one customer in a relationship of millions Aviva have. But I can tell you that securing my business would have been far more profitable for them longer term than churning every 12 months like I’ve just done.

It’s a massive diservice to their staff who I can say work bloody hard for sometimes very little reward or thanks. It does a diservice to their shareholders who expect and demand returns on their investment that would be higher if they used technology to secure customers longer term to make larger profit and it does a Hugh diservice to their customers who they hope to sneak up on at renewal in the hope they’ll trap even 25% of them beyond 12 months with policies that provide absolutely zero difference to what they did 12 months ago except for premiums that bear no reflection of the actual risk that customer presents to them.

It’s bad business and it sucks Aviva

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