In a world where insurance premiums are rising, consumers are taking control of their decisions like never before. Whether it’s shopping for a better deal or switching providers to escape soaring renewal costs, the insurance landscape is changing rapidly. New data from Consumer Intelligence’s Insurance Behaviour Tracker (IBT) reveals that 2024 is the year of the savvy shopper. With sharp increases in premiums, particularly for long-standing policyholders, and younger customers rethinking their approach to comparison websites, insurers are facing a critical moment. Will they adapt to the shifting dynamics, or risk losing customers to more competitive offers?
In the motor insurance market, there has been a notable 7% increase in respondents seeing higher premiums at renewal compared to this time last year. The over 50s are leading the change in shopping around, while 18-24 year olds have seen a slight drop in their shopping rates, despite facing some of the largest premium increases. These younger drivers, when faced with a price hike, often experience steeper increases than their older counterparts.
When we look at home insurance, shopping peaked in the second half of 2023 (H2 23) when the largest number of customers reported higher premiums. While the market stabilised slightly in the first half of 2024 (H1 24), many consumers with 1-2 years of tenure continue to see price increases at renewal. Like in motor insurance, older policyholders are more likely to shop around, with a 6% increase in over 50s shopping compared to the previous year.
Premium increases as the key driver
It comes as no surprise that price is the dominant factor driving both shopping and switching behaviour. In motor insurance, our data shows a 5% increase between H1 23 and H1 24 in customers switching to find the cheapest brand available. This trend is particularly obvious for those facing renewal increases of £21 to £30, a notable trigger point for switching.
Similarly, in home insurance, more consumers are saying they shopped around because of price increases compared to last year. However, not all consumers are actively shopping; some are sticking with their providers because they are unable to find a cheaper alternative. This highlights a growing complexity in switching behaviour, as price-sensitive consumers weigh their options in a volatile pricing environment.
The impact of price comparison websites
One of the most interesting insights from our IBT data is the role of PCWs in the shopping journey. While PCWs remain a crucial tool for many consumers, younger drivers in particular are less likely to use them. In fact, one in four drivers aged 18-24 did not use a PCW due to being unaware of their existence, a surprising statistic that suggests insurers may need to rethink how they engage this demographic. Contrastingly, older consumers are more likely to use PCWs to compare quotes. Nearly one-in-five people said they used a different method of purchase to the way they obtained their quote, with young people more likely to do this than older customers.
Looking ahead
As we move through the remainder of 2024, insurers will need to stay on top of these evolving shopping and switching patterns. The rise in price-driven switching and the differing behaviours across age groups highlights the importance of tailored strategies. For insurers, the challenge will be balancing competitive pricing with customer retention, particularly in segments where price sensitivity is high.
Insights that will enable you stay ahead...
Unlock valuable insights into consumer behaviours and market trends with our Insurance Behaviour Tracker. Understand key decision-making factors at renewal, track brand performance, and make data-driven business plans.
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