Home insurers make all of their £1 billion-a-year profits from customers who stay with them for six years or longer, a report reveals.
Citizens Advice found loyal customers pay an average £325 for their sixth year against £172 for new ones. The charity made a super-complaint on the “loyalty penalty” last September.
It reckons people have paid a £377million penalty since then – and those with issues like ill-health may be paying most.
The CAB estimates 3.75 million policies are at least 11 years old and seven in 10 of those customers may be vulnerable.
Chief Gillian Guy said: “It is appalling companies are making all their profit by exploiting loyal customers.”
CAB analysis of 2016 figures from the Financial Conduct Authority and Association of British Insurers found 9.3million policies lasting six years or longer and 6.9million that switched after a year.
Hugh Savill, director of regulation at the Association of British Insurers, said: “Whether a firm makes a profit or not depends on many factors which these figures overlook.
“However, the insurance industry has already acknowledged that fierce competition between insurers for new business can result in long-standing customers losing out.
“Last year, insurance became the first and only sector to take voluntary, industry-wide action to tackle this issue, with firms committing to review premiums charged to customers who have been with them for more than five years.
"We always encourage people to shop around at renewal because, as Citizens Advice confirms, you can often get exceptional value this way.”
