In the next 12 months, an estimated 577,000 motor vehicle insurance policies are unlikely to be renewed with the same company. These are the latest findings from the Roy Morgan Research consumer single source survey of more than 50,000 people per annum.
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% (9000).
These companies compare unfavourably with expected losses of only 3.6% for NRMA, 2.9% for AAMI and 2.6% for the RACV.
“In the past, the majority of consumers have switched insurance policies on account of price,” says Roy Morgan Research industry communications director Norman Morris.
“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.”
“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,” he says.
According to the Roy Morgan data, 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,” says Morris.
In recent times Morris says he has 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.”
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