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2.5 million car insurance policies at risk of switching

Source: Roy Morgan Single Source (Australia), 12 months to December 2013, n= 30,468; 12 months to December 2017, n= 32,036 Base: Australians 14+ with comprehensive car insurance
Over the last 12 months, more than one in five (2.54 million) holders of comprehensive car insurance policies either changed companies or renewed with the same company after approaching others. This represents an increase of nearly 400,000 over the last four years and presents a major marketing opportunity to target these policy holders who are ‘looking around’ for an alternative company. It also represents a major risk to existing insurance companies.

These are the latest findings from Roy Morgan’s Single Source survey of over 50,000 consumers per annum, including over 32,000 with comprehensive car insurance 

Trend is away from automatic policy renewal.

In 2013, 80.9% of comprehensive car insurance policies were automatically renewed without holders approaching another company. This has now declined down to 78.5% in 2017 and it appears to be a continuing trend.

Current Comprehensive Car Insurance Holders – Action on last renewal

Source: Roy Morgan Single Source (Australia), 12 months to December 2013, n= 30,468; 12 months to December 2017, n= 32,036 Base: Australians 14+ with comprehensive car insurance

The biggest change over the last four years is that an increasing proportion of comprehensive policy holders are now approaching another company before they renew with their existing company. This has increased from 12.1% in 2013 to 15.5% currently.

Although the proportion of policy holders that actually change companies on renewal has gone down marginally over the last four years from 7.0% in 2013 to 6.0% currently, there still remains a considerable risk of loss while 21.5% do not renew automatically. 

Norman Morris, Industry Communications Director, Roy Morgan says:

“The increasing trend for comprehensive car insurance policy holders to be looking around before renewing is potentially an indication of their lack of trust that they are being rewarded for their loyalty with the best deal.” 

“The detailed analysis of the research shows the major reasons that policy holders switch companies are to do with price, with over three quarters of them specifically mentioning the ability to get a better price elsewhere and the size of increase from their existing company. Only around 5% of switchers give reasons associated with bad claims experience.”

“With such a large number of potential switchers it is worth insurance companies not only understanding their relative competitiveness in terms of premiums but other measures, including overall satisfaction,  claims satisfaction, share of insurance products and the extent to which policy holders look around.”

“Although only a relatively small proportion of comprehensive car insurance policy holders actually switch companies over a 12 month period, the magnitude of those that are considering to do so represents a great opportunity or risk if they are not understood.”

“Roy Morgan can provide a great deal of information on policy holders across all types of insurance and for each company as well as long term trends which are invaluable in putting the current market in context.” 


For comments or more information please contact:
Suela Qemal, General Manager - Financial Services & Consulting
Office: +61 (3) 9629 6888
Suela.Qemal@roymorgan.com


About Roy Morgan

Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in collecting objective, independent information on consumers.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

1,000

±3.0

±2.7

±1.9

±1.3

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2