New research has revealed that most general-insurance policies were still renewed automatically, with only one in five policies subjected to review at renewal time.
Roy Morgan’s General Insurance Currency Report found that over the 12 months to Sept. 2018, 77.4% of general-insurance policies were renewed with the same company without approaching other insurers – a slight drop from 79.8% recorded five years ago, suggesting a gradual change in buyer behaviour in the highly competitive market.
Findings showed that some 9.8 million, or, 19.8%, of policies were considered for change over the last 12 months, an increase from 17.7% in 2013. Of the 19.8% of policies, 15.1% were renewed with the same company after approaching other companies, and another 4.7% actually switched insurers.
Despite an increase in policyholders who shop around for a better deal, the number of policies that actually switched insurers over the last five years was down to 4.7%, from 5.8% in 2013.
“Our research shows that general-insurance policyholders primarily say that they change companies or shop around due to issues relating to better premiums,” said Norman Morris, industry communications director at Roy Morgan. “Understanding why people shop around goes well beyond cost and looks at many other issues that motivate people to look around or switch. These issues are available by company and include the fact that some people say that they just always shop around, better product elsewhere, purchased a new car, recommended by a family member or friend, bad claims experience or simply poor customer service.”
Based on the proportion of the policies renewed without the holder approaching another company, the most loyal customers are with RACV (81.7%), RAC (81.6%), and RACQ (80.8%) – well above the industry average of 77.4%.
The least loyal customers are with Budget Direct (60.8%) and Youi (70.3%).
The companies that saw improvement in their customers’ loyalty were Youi (up by 15.3%) and Apia (up by 3.7%), while the rest showed declines in customer loyalty.