A major consumer group has applauded moves by the UK’s Financial Conduct Authority (FCA) to force insurers to provide renewal notices that include the previous year’s premium rates and the reasons for any change.

The move, which the FCA says is part of a wider push to protect consumers, supports an Australian Consumer Action Law Centre campaign for exactly the same change.

“If Australian insurers are waiting for evidence that consumers will benefit, well, that has been proven by the FCA,” Consumer Action Law Centre Senior Policy Officer David Leermakers told insuranceNEWS.com.au.

The group started a campaign earlier this year urging insurers to be more transparent about premium changes.

It called for renewal letters to detail the previous year’s premiums and the reasons for any changes.

Consumer critics say insurers lower premiums to attract new customers and then raise them in following years. Customers commonly stay with their personal lines insurers for five or more years.

Mr Leermakers says talks with major insurers have indicated they are prepared to act on the matter.

“There is this real drive towards transparency, particularly in my discussions with the big insurers,” he said.

“The discussions we have had with insurers suggest nobody is against this idea. They are all quite open to it. Disclosing premium in renewal notices is a simple way to start.”

The first insurer to disclose previous premiums is “justifiably going to be seen by their customers as being transparent and honest”, he told insuranceNEWS.com.au.

The FCA proposal follows a trial last year involving more than 300,000 UK consumers to determine if they changed insurers when provided with various types of information on renewal notices.

Information on the previous year’s premium had the biggest impact, with 11-18% of consumers changing provider or negotiating with the current one for better rates.

The FCA is seeking public feedback by March 4 for the proposal and other steps, including requiring insurers to engage with customers who have renewed at least four times and keeping records of previous premiums.

“We hope the proposals encourage more people to shop around for the best product for them,” FCA Director of Strategy and Competition Christopher Woolard said.

“It is important that insurers give their customers the information they need to do this and ensure they’re treating their customers fairly.”