AV. Aviva Plc

By Adam Clark

Aviva PLC (AV.LN) will launch insurance policies which guarantee the same price for new and existing customers in the face of mounting regulatory pressure on British insurers over expensive renewals.

The FTSE 100 insurer said Wednesday that its AvivaPlus product will be an "industry-first" subscription deal. On home and car insurance, Aviva will offer a renewal-price guarantee that ensures existing customers are offered the same or a better price than an equivalent new customer.

Aviva's move is the most high-profile response yet to a continuing regulatory investigation into whether British insurers charge unfair prices to longstanding customers, launched in October by the U.K.'s Financial Conduct Authority. The increasing popularity of price-comparison websites in the British market has led to insurers offering hefty discounts to attract new customers but subsequently hiking prices on renewal, which the FCA said could harm vulnerable customers.

"Aviva's competitors will no doubt watch with interest to see how the new product fares with customers and whether this could be a new dawn for the industry," Paul De'Ath, analyst at stockbroker Shore Capital, said.

"Unfortunately, without either regulatory intervention (which could yet move in this direction) or a collective move by the industry it is unlikely that the traditional competitive discounting will leave the industry anytime soon, in our view," he said.

AvivaPlus will be rolled out over the next few weeks and will only be available to customers who buy directly from Aviva, the company said.

"AvivaPlus is a reinvention of insurance, which has been developed and tested with customers' needs at the centre, and it's now starting to roll out alongside our existing products. Like subscription services, it's designed to make it easy for customers to change their cover as often as they want without incurring charges," Andy Briggs, chief executive of U.K. insurance at Aviva, said.

Write to Adam Clark at adam.clark@dowjones.com; @AdamDowJones

(END) Dow Jones Newswires

December 05, 2018 06:22 ET (11:22 GMT)

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