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Where an insurer offers a discount on the value of a premium to the insured, this effectively reduces the value of the premium that is liable to IPT. Here are some examples of such discounts.

• No claims discount (or bonus): This is a type of discount frequently offered in motor insurance business. If the insured does not make a claim in the period covered by the policy, a discount is offered on the renewal premium. This discount can rise to amounts as high as 60% of the premium with an extra 5% available for an insured who has the maximum discount for repeated years.
• Introductory discounts: When an insurer wishes to expand an area of their business they may offer a discounted premium to attract new customers.
• Renewal discounts: When an insurer wishes to maintain the same level of business, especially in the face of competition, they may offer discounts to current customers who renew their policies with them.
• Good customer discounts: »Ê¹ÚÌåÓýappse are similar to renewal discounts. »Ê¹ÚÌåÓýappy may be offered to customers who are prestigious or require, and pay for, extensive insurance cover. Insurers offer these discounts to keep these customers, and maintain their market position.