In a world the place insurance coverage premiums are rising, customers are taking management of their choices like by no means earlier than. Whether or not it’s searching for a greater deal or switching suppliers to flee hovering renewal prices, the insurance coverage panorama is altering quickly. New information from Shopper Intelligence’s Insurance coverage Behaviour Tracker (IBT) reveals that 2024 is the yr of the savvy shopper. With sharp will increase in premiums, notably for long-standing policyholders, and youthful clients rethinking their strategy to comparability web sites, insurers are dealing with a vital second. Will they adapt to the shifting dynamics, or threat dropping clients to extra aggressive presents?
Within the motor insurance coverage market, there was a notable 7% improve in respondents seeing greater premiums at renewal in comparison with this time final yr. The over 50s are main the change in purchasing round, whereas 18-24 yr olds have seen a slight drop of their purchasing charges, regardless of dealing with a few of the largest premium will increase. These youthful drivers, when confronted with a worth hike, usually expertise steeper will increase than their older counterparts.
Once we have a look at house insurance coverage, purchasing peaked within the second half of 2023 (H2 23) when the most important variety of clients reported greater premiums. Whereas the market stabilised barely within the first half of 2024 (H1 24), many customers, notably these with shorter insurance policies, proceed to see worth will increase at renewal. Like in motor insurance coverage, older policyholders usually tend to store round, with a 6% improve in over 50s purchasing in comparison with the earlier yr.
Premium will increase as the important thing driver
It comes as no shock that worth is the dominant issue driving each purchasing and switching behaviour. In motor insurance coverage, our information reveals a 5% improve between H1 23 and H1 24 in clients switching to seek out the most affordable model out there. This development is especially apparent for these dealing with renewal will increase of £21 to £30, a notable set off level for switching.
Equally, in house insurance coverage, extra customers are saying they shopped round due to worth will increase in comparison with final yr. Nonetheless, not all customers are actively purchasing; some are sticking with their suppliers as a result of they’re unable to discover a cheaper various. This highlights a rising complexity in switching behaviour, as price-sensitive customers weigh their choices in a unstable pricing atmosphere.
The influence of worth comparability web sites
One of the crucial attention-grabbing insights from our IBT information is the position of PCWs within the purchasing journey. Whereas PCWs stay a vital software for a lot of customers, youthful drivers particularly are much less seemingly to make use of them. In truth, one in 4 drivers aged 18-24 didn’t use a PCW as a consequence of being unaware of their existence, a stunning statistic that implies insurers could have to rethink how they have interaction this demographic. Contrastingly, older customers are extra seemingly to make use of PCWs to check quotes. Almost one-in-five individuals stated they used a unique methodology of buy to the way in which they obtained their quote, with younger individuals extra seemingly to do that than older clients.
Trying forward
As we transfer via the rest of 2024, insurers might want to keep on prime of those evolving purchasing and switching patterns. The rise in price-driven switching and the differing behaviours throughout age teams highlights the significance of tailor-made methods. For insurers, the problem will likely be balancing aggressive pricing with buyer retention, notably in segments the place worth sensitivity is excessive.
In each the motor and residential insurance coverage markets, those that can navigate these dynamics, leveraging data-driven insights, will likely be finest positioned to thrive in an more and more aggressive panorama.
Obtain our free motor and house indices to achieve perception into market actions, benchmark the most important motor and residential insurance coverage manufacturers, and assist you perceive the info behind the outcomes.
