Chapter 4

Question 1

What is an example of “one-period” insurance?

Answer 1

Builders often take out short-term property policies known as contract works or contractors all risks cover
A charity setting up a short-term project or event and wishes to insure its property and liability

Question 2

Why are insurers keen to encourage the renewal of policies?

Answer 2

If the client base remains stable, statistical information about the portfolio will be more accurate
Policy renewal is a lot cheaper than acquiring new business

Question 3

What is the renewal notice?

Answer 3

It brings to the insureds attention that the period of insurance is coming to an end; it will contain the renewal premium and any proposed changes in the terms and conditions

Question 4

What regulatory rules have the FCA implemented which affect personal insurances?

Answer 4

Insurers and intermediaries must:
- disclose last years premium on renewal notices
- include text too encourage consumers to check their cover and shop around for the best deal at each renewal
- identify consumers who have renewed with them four consecutive times and give these consumers an additional prescribed message encouraging them to shop around