Aviva Insurance Limited · DRN-5816359

The complaint Mr D has complained about the premium Aviva Insurance Limited charged for his home insurance policy. What happened Over the last few years the renewal premium for Mr D’s policy has been: Year Premium 2022 £283.17 2023 £382.29 2024 £535.19 2024 (after Mr D added no claim discount protection) £612.11 2025 £856.93 Mr D feels most of the increased premium is unexplained and is simply increased profit for Aviva. He also feels he is being punished for making a complaint last year. He doesn’t believe Aviva has specific rating factors that are driving the price increase for his policy over the last four years. Aviva said its pricing is reviewed annually and premiums may increase or decrease based on various factors – including claims trends, rising costs of replacement items, parts and labour, updated risk data and market conditions. It also said the premium charged wasn’t influenced by any previous complaints a consumer had made. Aviva further told Mr D it wouldn’t provide him with specific details on its pricing model as this was commercially sensitive information. Mr D didn’t think Aviva’s response to his complaint was satisfactory so he referred the matter to us. His view remained that what was really happening was Aviva increasing its profits by abusing its dominant market position and then hiding behind its pricing model as commercially sensitive information. Our investigator didn’t think the complaint should be upheld. He was satisfied the premium Aviva offered was in line with what it would have offered to other customers with similar circumstances to Mr D. Mr D didn’t accept our investigator’s opinion. He didn’t think any account had been taken of the fact he’d offered to sign a non-disclosure agreement so that Aviva could disclose its pricing model and demonstrate the specific rating factors that led to the premium increase. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Premium increase from 2022 to 2024

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I’m able to dismiss a complaint without considering its merits if I consider dealing with it would otherwise seriously impair our effective operation. Examples of a type of complaint that would seriously impair our effective operation include where the subject matter of the complaint has previously been considered by the Financial Ombudsman Service (unless material new evidence which I consider likely to affect the outcome has subsequently become available). Mr D brought a similar complaint to us in 2024 – he complained that his premium had increased by 89% between 2022 and 2024. Another of our investigators issued assessments on that complaint on 7 February and 24 April 2025. Mr D didn’t pursue the matter further so the complaint was closed in May 2025 with no further action taken. I’ve not seen any new material evidence that I think is likely to affect the outcome of Mr D’s previous complaint. I’m therefore dismissing any part of this current complaint that relates to the premium increases from 2022 to 2024. Accordingly, I’ve only considered the premium increase from 2024 to 2025. Premium increase from 2024 to 2025 Mr D’s policy was 'underwritten' based on information Aviva gathered about him and his circumstances. Essentially, that means Aviva carried out a risk assessment on the likelihood of Mr D making a claim and how much that claim is likely to cost. Based on those factors, it decided whether to offer a policy and, if so, the right amount of premium to charge. There are many different ways insurers make a risk assessment, and there’s no 'correct' way of doing it. Each insurer will take its own view on what factors to take account of and how much weight to put on each of them. Some may use only a few factors, others many more. Some may place a lot of weight on a particular risk factor, others may place less weight on it. Different insurers also have different appetites for risk – some are more cautious and that may mean the premium they charge is higher on average than other insurers. This is why different insurers offer policies at different prices for the exact same set of circumstances – each is taking its own approach to assessing the risk posed. None of them are 'right' or 'wrong' – whether they’re the cheapest, the most expensive or the average. It may sound unfair that an insurer can choose to set the premium however it likes – including however much profit it may wish to make. But that’s no different to any other business providing a product or service in a free market. The insurance market is very competitive and many consumers’ choices are driven significantly by price. Ordinarily consumers have freedom to choose between many insurers and can avoid those they feel are too expensive or poor value for money. Indeed, Mr D was under no obligation to renew the policy and he was free to search the market to look for a better deal. I note that despite the premium increasing from 2024 and despite Mr D being able to insure his home elsewhere he decided to renew the policy with Aviva. This case is slightly different to the circumstances I’ve described above because it’s not about comparing Insurer A’s risk appetite with Insurer B’s – it’s about comparing Aviva’s risk appetite from one year to the next. The same principles nevertheless apply. The risk factors an insurer takes into account and the weight placed on them change over time – in some cases we’ve seen them constantly change to reflect 'live' information. Similarly, an insurer’s risk appetite will change over time. So Aviva might deem something low risk one year, but high risk the following year (and vice versa). That can mean the same circumstances generate different premiums from one year to the next. One example might be that Aviva thinks the area a policyholder lives in is now at a higher risk of crime than a year ago. In some cases, the change is so vast that the insurer decides to withdraw completely from the market.

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It’s ultimately up to each insurer what risk factors they take account of, how much weight they place on those risk factors and how risk averse they are. It’s also ultimately up to each insurer how much they charge for their policies based on that. It’s not my role to get involved with or dictate to insurers how they should underwrite their policies. Having said that, insurers need to treat consumers fairly – which in the context of this type of complaint means that Mr D has to be treated consistently with Aviva’s general approach to the pricing of its product. In other words, it’s likely to be unfair if Aviva has treated Mr D differently to the way it would have treated other consumers in the same circumstances. Aviva has provided me with confidential business sensitive information (ie the risk factors it took into account) to explain how Mr D’s premium was calculated. As it’s confidential I’m not going to go into further detail on that. However, I’ve checked it and I’m satisfied that Aviva applied the risk factors appropriately given the risk it felt Mr D posed and that the premium Mr D was charged was calculated correctly. For completeness and comparison, the premium was cheaper than what Aviva would have charged a new customer. So, for all the above reasons, I conclude that Aviva treated Mr D fairly when it calculated the renewal premium for its policy. Non-disclosure agreement I don’t think Mr D’s willingness to sign a non-disclosure agreement – to protect Aviva’s commercially sensitive information – has any bearing on the outcome of this complaint. I appreciate Mr D might want to see/know how Aviva has specifically rated him and his property. But not seeing this or knowing it doesn’t change the fact that based on what I’ve seen I’m satisfied that Aviva has treated Mr D fairly in charging the premium it did. It also doesn’t change the fact that the information is commercially sensitive. My final decision I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr D to accept or reject my decision before 27 April 2026. Paul Daniel Ombudsman

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