Why did the RAC offer me such heavy discounts upon cancellation?

I have been a RAC member since 1981 and received my renewal recently. This quoted £135 with members discount for Roadside and Recovery (personal basis for me and my wife). My motor insurer covers me for a limited breakdown cover, which can be extended for a modest cost to cover roadside and recovery for car only. I decided to cancel my RAC membership and phoned them to advise them. The first person I spoke to offered to reduce my renewal cost to £109, but when I said no thank you I was passed on to another section who offered to reduce it to £89 as I had been a member for a long time with no recent claims. I told them I considered this to be dishonest and that they should have offered this to me in my original renewal.

Asked on 10 June 2012 by MH, Camberley

Answered by Honest John
This is standard practice from many companies owned by private equity funds. The AA is the same and so are many insurers.
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