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2 September 2019
Only 3.9% of insurance buyers switched provider when taking out a policy during the past 12 months, the latest quarterly Roy Morgan report on purchasing decisions shows.
The report says 79.4% renewed without approaching any other provider, 14.3% remained loyal after contacting other companies and 2.4% took out insurance for the first time.
Roy Morgan CEO Michele Levin says policyholders primarily say that they switch or shop around due to premium rises, but other motivations include bad claims experience, poor customer service, better products and recommendations.
“Well over three-quarters of general insurance policies are renewed automatically with the same company without looking around,” she says.
“However, this still leaves almost a fifth of the market subject to review at renewal time and presents both risks and opportunities for insurance companies looking to grow their market share.”
The most loyal customers, based on the proportion of policies renewed, are with RACV Insurance, with 85.5% staying on board. In the case of Apia 84.6% renewed, while CGU ranked third with 84.3%.
Among the majors, AAMI and GIO have the least loyalty with only 74.6% of customers renewing, compared with the market average of 79.4%.
The General Insurance Industry Market Overview Currency Report is based on personal interviews.