In the next 12 months, an estimated 577,000 motor vehicle insurance policies and 842,000 household policies are unlikely to be renewed with the same company. This is a total of 1.4 million policies and represents 3.8% of the total market. These are the latest findings from the Roy Morgan Research Consumer Single Source survey of approximately 50,000 people per annum.
Of the 842,000 Home Insurance policies that are unlikely to be renewed in the next 12 months, an estimated 246,000 (29%) are expected to come from NRMA, AAMI, and Allianz, however the companies with the highest proportions of their policies unlikely to be renewed were at Coles with 7.5% (13,000) followed by SGIC (SA) with 6.7% (13,000) and ANZ with 6.2% (16,000). The switching levels at the three biggest home insurers were much lower with NRMA (3.9%), RACV (3.8%) and AAMI (3.6%).
Proportion of Home Insurance policies unlikely to be renewed with the same company in the next 12 months
Base: Australians 16+ with Home Insurance, n = 14,753 Source: Roy Morgan Single Source (Australia), 6 months to May 2014
Motor Vehicle Insurance
The largest number of Motor Insurance policies not likely to be renewed is also expected to come from NRMA, AAMI and Allianz, with an estimated 190,000 (33%) policies between them. The highest proportion of Motor Insurance policies unlikely to be renewed at the same company did not come from the three larger companies but elsewhere, with Bingle expected to suffer the highest proportion of loss with 9.5% (10,000), followed by SGIC (SA) with 8.6% (12,000) and Real Insurance with 8.2% (9,000). These companies compare unfavourably with expected losses of only 3.6% for NRMA, 2.9% for AAMI and 2.6% for the RACV.
Proportion of Motor Insurance (excl. CTP) policies unlikely to be renewed with the same company in the next 12 months
Base: Australians 16+ with Motor Insurance (excl. CTP), n = 16,618 Source: Roy Morgan Single Source (Australia), 6 months to May 2014
Norman Morris, Industry Communications Director Roy Morgan Research says:
“In the past, the majority of consumers have switched insurance policies on account of price. While newer entrants with more attractive pricing have entered the market, they are having some difficulties retaining customers, suggesting that something beyond pricing is prompting consumers to consider switching. It is likely that customer service expectations could be somewhat of a challenge in some instances.
“Loyalty cannot be taken for granted despite the high levels currently experienced in the General Insurance market. Although it is clear that larger brands are expected to lose a greater number of policies, they are not necessarily at risk in losing the highest proportion of their customers. The current market highlights opportunities for those looking to expand their market share, but also highlights the need to protect territory and customers.
“The Roy Morgan data indicates that some consumer groups are more vulnerable than others. These groups will be affected by pricing policies, by changes in their own situation including the threat of or loss of employment, and the impact of a tough budget / interest rate movements.
“In recent times we have observed that new entrants seem to be tailoring their product to suit those with specific needs and situations. However, while these and other brands may appear to be more attractive, the challenge undoubtedly is to win customer loyalty and retain customers.”
Roy Morgan Research
Roy Morgan Research is Australia's best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
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