Over one million risk and life insurance policies could change companies in the 12 months to June 2018, market research firm Roy Morgan has revealed.
According to the Single Source survey, 1,008,000 risk and life insurance policies – 10.8% of the total market – have the potential to change companies. The figure is the sum of the 242,000 that actually switched to another company and the 766,000 that approached other companies before renewing with their existing company.
This signifies a high predisposition to switching or a lack of brand loyalty in the Australian market, Roy Morgan said.
Policyholders between ages 35 and 49 are the most likely to switch, making up 42.2% of the total. Next most likely are those aged 50 to 64, at 35.7%.
Price is the strongest incentive to switch or look around, with 42.8% citing it as the primary reason. Meanwhile, 26.8% say that they ‘always shop around’ for other options. Only 9% cite an increase in renewal price as the reason for switching.
Advice from others also plays a role in considering switching, with 6.1% crediting their advisor or broker, while 3.1% heeded their family, friends, or colleagues.
“Life and risk insurance is likely to be regarded as a grudge purchase and is often included with superannuation or switched as a result of price,” said Norman Morris, industry communications director at Roy Morgan.
“The segment with the greatest number of potential switchers is the 35-49 age group, with 425,000 or 42.2% of the total,” he said. “This group is also likely to be coping with young families and other cost pressures including mortgages and, as a result, may not always be interested in taking out risk and life insurance despite the fact that often they have the greatest need. All personal income groups have shown switching potential, with the largest segment being the 281,000 in the $60,000 to $99,000 bracket.”