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8 June 2021
Consumers with motor and home policies have been far more likely to switch their insurance provider since the COVID-19 pandemic began, research from Roy Morgan shows.
Nearly 9.7 million vehicle insurance policies were “at risk of being switched to another provider” in the year to March, almost double the level in the previous corresponding period. For household policies, 6.9 million were at risk of being switched, compared with 3.7 million a year earlier, the company says.
The vehicle insurance market totals more than 30 million policies, including compulsory third party, while household insurance comprises 25 million policies, Roy Morgan says.
Roy Morgan CEO Michele Levine says COVID-19 caused Australia’s first recession in three decades, leading to substantial stress on household budgets, despite record Government stimulus spending to support the economy.
“The big increases in Australians considering switching their vehicle and household insurance providers shows that in times of uncertainty and potential financial stress people are more likely to be on the lookout for the best deal they can possibly find to insure some of their valuable goods,” she said.
Of the 9.7 million vehicle policies at risk of being switched, 7.2 million were ultimately renewed with the same company, according to Roy Morgan.
“However, this still leaves over 2.4 million vehicle insurance policies that were switched, representing 7.9% of the more than 30 million plus policies in the market,” Ms Levine says.
Over a fifth of household insurance policies, 22%, were renewed after approaching other companies, up 7.7 percentage points from a year ago, while 6.1% of policies were switched, up from 3.7% in the pre COVID-19 year. About 3.8% of policies were taken out for the first time, compared to 1.6% pre COVID-19.
Ms Levine says the data shows the opportunities available for fast-moving insurance companies to tailor product offerings to those looking for a better deal and to potentially sign up a customer looking to adjust their policy to suit changing financial circumstances.
Roy Morgan’s Single Source insurance data is derived from interviews conducted with over 50,000 Australians each year, including details of more than 75,000 vehicle insurance policies and over 65,000 household insurance policies.