New data has revealed more car insurance policyholders are looking to switch as compared to any other type of insurance. Out of those planning to switch, 87% cited saving money as their main reason for doing so. They are going to try to find a cheaper policy.
According to research commissioned for financial services review site, Smart Money People, and conducted by Consumer Intelligence, motor insurance premiums have increased above the rate of inflation and customer satisfaction for car insurance has decreased by a fifth year on year. The data was taken from Insurance Uptake Score, a new bi-annual barometer of insurance purchasing decisions, based on consumer predictions about whether they will continue with, purchase, increase, reduce, or cancel their cover of 10 types of annual insurance products most commonly purchased by individuals.
Home insurance has the second highest number of policyholders looking to switch providers.
The results follow a report from the Association of British Insurers (ABI) showing the average premium paid for private comprehensive motor insurance was £561 in Q3 2023, up 29% when compared to Q3 2022 data. This rate recorded is the highest since the ABI started collecting data in 2012.
Other reasons cited by those looking to switch include: changing the level of coverage (8%), a change in circumstances (10%), and having had a bad experience with their current provider (3%), according to Smart Money People’s research.
Of the one in 10 (11%) car insurance customers who have expressed intentions to change their coverage in the next 12 months, 7% are looking to increase their cover and 5% have intentions to reduce their cover.
The survey also found more than half of people who currently don’t have insurance, who are taking out a new policy in the next 12 months, are intending to pay monthly compared to 34% of those who currently have insurance.
“In a competitive landscape, and an unpredictable economic climate, insurers can future-proof their businesses by understanding consumer behaviour and needs both now, but also on the horizon. From gearing up for more monthly payments, to considering their add-ons, this is how insurers can adapt to survive,” said Jacqueline Dewey, CEO of Smart Money. “With growth for motor insurance looking slower than other personal lines insurance markets, it’s more important than ever for insurers to keep their finger on the pulse.”
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