The latest data from our Insurance Behaviour Tracker has highlighted some sizeable shifts in the Motor and Home insurance markets. This update focuses on the key consumer trends, and the impacts this has had on insurers and Price Comparison Websites (PCWs).
2023 and early 2024 brought unprecedented inflation across personal lines, with prices rising both at new business and renewal. These increases led consumers to shop around more, reversing a trend driven by General Insurance Pricing Practices (GIPP) reforms from 2022. Inflation also returned switching to pre-GIPP levels. Immediately post GIPP, policyholders had struggled to find a deal worth moving to; from 2023, the high cost of insurance meant any move was worth making.
The second half of 2024 saw fewer respondents reporting higher premiums at their renewal, particularly in the Motor market. How did consumers react to this change in conditions?
Consumers did shop around less with more favourable renewal conditions. However, the drop in those shopping around was far less than volume of respondents reporting lower premiums. With premiums decreases being lower than the record inflation, these steadfastly high prices may mean that some consumers are forced to shop out of necessity.
We may also be seeing very different cohorts of behaviour by renewal date. Those who have a late year renewal date may have seen an initial shock in 2023, followed by stability in 2024. Conversely, those with an early year renewal will have been surprised last year but may see a better renewal premium in 2025. With a renewal increase of around £40 being a trigger for Motor customers to shop around, we may see continued falls in shopping through the year.
The most regular reason for not shopping around across personal lines was policyholders liking the company they’re with. The main reason for shopping around was principle. Developing strong customer relationships is therefore key to drive customers away from a price-based shopping tendency.
While PCWs have been the main channel in Motor for a long time, the importance in Home has increased greatly in recent years. Admiral estimated in their Full Year 2024 results that the number of PCW customers in the Home market had increased by c.50% between H1 2023 and H2024. Our IBT data tells a similar story, with a c.10%pt increase in Home shoppers using PCWs between 2022 and 2024.
However, along with premiums this growth has softened. The Admiral estimate showed stable customers between H1 2024 and H2 2024, where competitive Home new business premiums decreased -1.4%. Analysis from SimilarWeb covering February 2024 to February 2025 saw a drop in traffic to the major four PCWs year-on-year. With premiums in both Motor and Home continuing to fall through the first quarter of 2025, both PCWs and insurers face a greater battle for a declining pool of new business customers.
One key characteristic in the firms which grew share through 2024 was not inactive customer bases, but an ability to hold onto their policyholders which did shop around. Brands newer to the sector tend to have more price sensitive books built up of customers who buy on PCWs. Respondents from these customers are more likely to shop around, but the most successful firms have the greatest percentage of shoppers who stay with the firm.
A theme of the 2024 results season has been firms’ capabilities in maximising their existing customer base. Aviva highlighted their ability to offer better prices to existing customers on PCWs, while Admiral reported +13% growth in their MultiCover product. With Consumer Duty driving a more value-led approach to business, firms are finding new ways to build long-term relationships which will lead to smaller new business volumes in the future.
Insurers are taking action to ensure they are maximising the opportunities presented to them. One major insurer is pricing incredibly keenly with their telematics product, while others lead with stripped back “Essentials” products. Brand stacking is widespread in Motor, with over half of quotes seeing at least two products from one brand in the top five positions. This trend is lessened in Home, particularly for policyholders aged 50+. Having many brands close together may boost conversion options, but without keen pricing groups may be leaving money on the table to competitors when squeezing them out.
Enhance transparency around policy features to clearly communicate value and differentiate beyond pricing alone.
Build relationships with customers, converting those who shop around on principle to those who stay because they like their insurer.
Capitalise on targeted opportunities, while not leaving money on the table to competitors.
Consider the journey that policyholders have been on in recent years, and move the conversation from price to value.
The evolving consumer dynamics driven by GIPP regulations, strategic shifts in insurer retention strategies and changing PCW engagement patterns, provide both challenges and opportunities. Staying closely attuned to these trends will enable insurers and PCWs to effectively adapt strategies, ensuring continued success amidst this shifting landscape.
Following the FCA's General Insurance Pricing Practices (GIPP) directive, we are about to embark upon a significant shift in which we will see the eradication of price walking, the removal of loyalty penalties, and insurers competing harder than ever to not only attract but more importantly, retain customers.
The GIPP Performance Tracker provides you with the ability to track changes across the insurance market and help inform your product proposition and pricing strategy in response to GIPP.