Centrica : Evolving our products and services to meet the changing needs of our customers

The energy world is evolving rapidly and we have to adapt to it. The vision which inspires our product strategy is to satisfy the changing energy needs of our customers by helping them to look after their homes and giving them peace of mind.

We will do this by delivering products and services which follow four key principles:

• Hassle free, simple and transparent - Clear and easy to understand with no catches, and easy to access.
• Peace of mind - Takes the worry away from managing your home.
• Value for money - Provides cost effective solutions that are worth the money.
• Innovative solutions - Makes a real difference to customers by offering them new solutions to existing problems.

In addition, we believe that no customer is standard:

• We'll treat our customers as individuals, recognising their value, needs and how long they have been a customer with us.
• We'll use our Rewards scheme to thank our customers for choosing us.
• We'll show we understand that their homes and lives are unique.
• We'll bundle together more of the things our customers really want for a great price.
• We'll offer every customer on the Standard Variable Tariff a new tariff that's right for them.

To deliver this, we are changing what we offer our customers, and how we offer it, to give them simple, personalised, great value solutions that will meet their needs and make life easier.

Closing the Standard Variable Tariff to new customers and offering every customer a Fixed-Term Contract

From the end of March 2018, we will close our Standard Variable Tariff (SVT) to new customers. They will no longer be able to join the SVT, whether as a new customer, or through a change in circumstances (such as moving into a new-build house), or at the end of a Fixed-Term Contract.

Instead, we will offer simple modular Fixed-Term Contracts (FTCs). These are 1-year to 3-year energy deals with personalised features. As part of this change, we'll be trialling and launching an exciting range of new fixed term products including variable rate, unlimited use (subject to reasonable usage) and green tariffs by June 2018.

From the end of March 2018, if customers don't choose one of these FTCs when they roll off their existing tariff, they will automatically move onto a new default tariff. We believe there should be a single design and name for the default tariff across the industry to aid customer understanding. Our preference is a 1-year contract with no exit fees, an emergency tariff. This could have a fixed or variable price (tracking an index). But the latter will depend on getting permission from the regulator, Ofgem.

We also believe that Ofgem should ban all socalled 'Evergreen' tariffs, which have no expiry date, moving the whole market to FTCs. But we will not do this unless Ofgem makes it compulsory for all suppliers.

We will deliver initiatives alongside our new, simple product suite to help customers. These will include simpler bills, encouragement to take a smart meter and the extension of the pre-payment meter price cap to vulnerable customers.

In 2017, we contacted all customers on SVTs to offer them a different product. In 2018, we will continue to contact our SVT customers with offers to switch to an FTC.

New services products

Our current HomeCare packages help to keep customers' homes warm and working. They cover boilers, central heating, plumbing and electrics. They help customers to avoid the unexpected costs of breakdowns.

In addition to these packages, we will offer individual products and personalised bundles to suit different customer needs. This will also enable us to create lower priced, entry level products for a wider range of new customers who would prefer a simpler, basic level of cover or on-demand support when things go wrong.

Offering great value bundles

We know that many customers to whom we supply energy are also interested in our HomeCare and Hive range of products. So, we will offer these to our supply customers as a discounted bundle. Examples we are launching include:

• Energy and boiler breakdown cover. A bundle offering annual boiler cover to energy supply customers for a fixed £99 excess.
• Energy and Hive Welcome Home Pack. A newly designed fixed energy plan that combines energy supply and Connected Home technology at no additional cost.

We'll be expanding our range of bundles in 2018 to help customers save time and money.

British Gas Rewards

In February we announced that we were launching Rewards and since the launch in April half a million British Gas customers have signed up. Rewards provides value for money to our customers and shows appreciation for their loyalty. For example, we offer:

• Loyalty Days - free energy supply based on how long a customer has been with British Gas.
• Free boiler service.
• Exclusive third party offers, such as Waitrose and Sky Movie Store vouchers.

Launching innovative products

We have launched a number of innovative customer solutions this year which we believe make a real difference to the smooth running of our customers' homes.

Local Heroes, now available nationwide, is a simple online service where you can book a local professional for a one-off job and their work comes with British Gas guarantee. Over one million jobs have already been completed.

Boiler IQ is a revolutionary technology that allows British Gas to keep an eye on customers' boilers remotely and detects when there is a problem. This service, in addition to our standard HomeCare packages, provides customers with convenience and peace of mind.