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Insurance giant Esure pockets £55m in sneaky customer fees
Insurance giant Esure pockets £55m in sneaky customer fees
This is a duplicate of the Blog Entry made on: 9th March 2016 19:17
This is a duplicate of the Blog Entry made on: 9th March 2016 19:17
....more than from home and motor policies combined
Millions of households taking out insurance are being hammered by sneaky admin charges or penalised for spreading their payments. Insurance companies are quietly using the ‘dark arts’ to squeeze more money from their customers. This tactic is highly profitable, but is kept under the radar by company bosses who prefer not to bring attention to these extra sources of income. The scale of this practice was revealed yesterday in the annual results of insurance giant Esure.
It raked in more profits from charging fees to customers who change their address or cancelled their insurance policies than it made from home and motor policies combined. The firm collected £21.1million from ‘policy administration fees’, more than three times the £6.7million profit made in its motor insurance business – and more than five times the £4.2million profit from its home insurance division. Customers are charged £26 if they change address or change paperwork, and £55 if they cancel their policy within the first year.
Esure also made £30.2million from the swingeing annual interest rate of 25.4 per cent it charges customers who choose to pay by monthly direct debit, rather than pay up front in one lump sum. Consumer groups have been critical of this practice, which penalises cash-strapped motorists need to spread the costs of their policy. Another £9.5million was collected from add-on policies sold to customers such as breakdown cover and home emergency cover, which is designed to protect households against mishaps such as a broken boiler. In total Esure, which owns female focused Sheilas’ Wheels and comparison website Gocompare, collected £68.3million from ‘additional services revenues’. Of this, £55.1million was pure profit – meaning the company banked a staggering £81 for every £100 it generated. The firm last night insisted that the figures are misleading. But James Daley, founder of consumer campaign website Fairer Finance said: ‘Customers are clearly being ripped off......Read more here
Millions of households taking out insurance are being hammered by sneaky admin charges or penalised for spreading their payments. Insurance companies are quietly using the ‘dark arts’ to squeeze more money from their customers. This tactic is highly profitable, but is kept under the radar by company bosses who prefer not to bring attention to these extra sources of income. The scale of this practice was revealed yesterday in the annual results of insurance giant Esure.
It raked in more profits from charging fees to customers who change their address or cancelled their insurance policies than it made from home and motor policies combined. The firm collected £21.1million from ‘policy administration fees’, more than three times the £6.7million profit made in its motor insurance business – and more than five times the £4.2million profit from its home insurance division. Customers are charged £26 if they change address or change paperwork, and £55 if they cancel their policy within the first year.
Esure also made £30.2million from the swingeing annual interest rate of 25.4 per cent it charges customers who choose to pay by monthly direct debit, rather than pay up front in one lump sum. Consumer groups have been critical of this practice, which penalises cash-strapped motorists need to spread the costs of their policy. Another £9.5million was collected from add-on policies sold to customers such as breakdown cover and home emergency cover, which is designed to protect households against mishaps such as a broken boiler. In total Esure, which owns female focused Sheilas’ Wheels and comparison website Gocompare, collected £68.3million from ‘additional services revenues’. Of this, £55.1million was pure profit – meaning the company banked a staggering £81 for every £100 it generated. The firm last night insisted that the figures are misleading. But James Daley, founder of consumer campaign website Fairer Finance said: ‘Customers are clearly being ripped off......Read more here