In a world the place insurance coverage premiums are rising, shoppers are taking management of their choices like by no means earlier than. Whether or not it’s purchasing for a greater deal or switching suppliers to flee hovering renewal prices, the insurance coverage panorama is altering quickly. New knowledge 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 prospects rethinking their method to comparability web sites, insurers are going through a vital second. Will they adapt to the shifting dynamics, or threat shedding prospects to extra aggressive provides?
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 going through a few of the largest premium will increase. These youthful drivers, when confronted with a value hike, typically expertise steeper will increase than their older counterparts.
Once we take a look at residence insurance coverage, purchasing peaked within the second half of 2023 (H2 23) when the most important variety of prospects reported greater premiums. Whereas the market stabilised barely within the first half of 2024 (H1 24), many shoppers with 1-2 years of tenure proceed to see value 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 value is the dominant issue driving each purchasing and switching behaviour. In motor insurance coverage, our knowledge exhibits a 5% improve between H1 23 and H1 24 in prospects switching to seek out the most cost effective model obtainable. This development is especially apparent for these going through renewal will increase of £21 to £30, a notable set off level for switching.
Equally, in residence insurance coverage, extra shoppers are saying they shopped round due to value will increase in comparison with final yr. Nevertheless, not all shoppers 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 shoppers weigh their choices in a unstable pricing setting.
The influence of value comparability web sites
Some of the fascinating insights from our IBT knowledge is the position of PCWs within the purchasing journey. Whereas PCWs stay an important instrument for a lot of shoppers, youthful drivers specifically are much less doubtless to make use of them. In reality, one in 4 drivers aged 18-24 didn’t use a PCW on account of being unaware of their existence, a shocking statistic that implies insurers might have to rethink how they interact this demographic. Contrastingly, older shoppers are extra doubtless to make use of PCWs to match quotes. Almost one-in-five folks mentioned they used a unique methodology of buy to the best way they obtained their quote, with younger folks extra doubtless to do that than older prospects.
Wanting forward
As we transfer by way of 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 shall be balancing aggressive pricing with buyer retention, notably in segments the place value sensitivity is excessive.
Insights that can allow you keep forward…
Unlock helpful insights into shopper behaviours and market tendencies with our Insurance coverage Behaviour Tracker. Perceive key decision-making components at renewal, monitor model efficiency, and make data-driven enterprise plans.
