In a world the place insurance coverage premiums are rising, customers are taking management of their selections like by no means earlier than. Whether or not it’s looking for a greater deal or switching suppliers to flee hovering renewal prices, the insurance coverage panorama is altering quickly. New knowledge from Client Intelligence’s Insurance coverage Behaviour Tracker (IBT) reveals that 2024 is the yr of the savvy shopper. With sharp will increase in premiums, significantly for long-standing policyholders, and youthful clients rethinking their method to comparability web sites, insurers are dealing with a important second. Will they adapt to the shifting dynamics, or danger shedding clients to extra aggressive gives?
Within the motor insurance coverage market, there was a notable 7% improve in respondents seeing larger 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 among 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 take a look at dwelling insurance coverage, purchasing peaked within the second half of 2023 (H2 23) when the biggest variety of clients reported larger premiums. Whereas the market stabilised barely within the first half of 2024 (H1 24), many customers with 1-2 years of tenure 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 knowledge reveals a 5% improve between H1 23 and H1 24 in clients switching to seek out the most cost effective model obtainable. 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 dwelling 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 vital fascinating insights from our IBT knowledge is the position of PCWs within the purchasing journey. Whereas PCWs stay a vital instrument for a lot of customers, youthful drivers particularly are much less possible to make use of them. Actually, one in 4 drivers aged 18-24 didn’t use a PCW on account of being unaware of their existence, a stunning statistic that means insurers could have to rethink how they have interaction this demographic. Contrastingly, older customers are extra possible to make use of PCWs to match quotes. Practically one-in-five individuals stated they used a special methodology of buy to the best way they obtained their quote, with younger individuals extra possible to do that than older clients.
Trying 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 might be balancing aggressive pricing with buyer retention, significantly in segments the place worth sensitivity is excessive.
Insights that may allow you keep forward…
Unlock helpful insights into shopper behaviours and market developments with our Insurance coverage Behaviour Tracker. Perceive key decision-making components at renewal, observe model efficiency, and make data-driven enterprise plans.
