Why softer pricing hasn't reignited switching

For years, the relationship in insurance was relatively predictable.

When prices hardened aggressively, consumers shopped harder.
When prices softened, switching activity accelerated as insurers fought aggressively for market share.

But the latest Consumer Intelligence behavioural data suggests that relationship is beginning to break down.

Despite sustained softening in new business pricing through much of 2025, shopping and switching activity across both motor and home insurance remains subdued.

And that may say less about consumer apathy — and more about how fundamentally the insurance market itself has changed.

Softer pricing has not translated into stronger switching

Across home insurance, shopping rates fell from 78% to 70% year-on-year, while switching dropped from 40% to 33%.

Motor insurance showed a near-identical pattern:

• shopping declined from 76% to 70%
• switching reduced from 37% to 33%.

This decline has happened during a period where market pricing conditions have materially softened compared to the inflationary peaks of 2023 and early 2024.

Historically, softer acquisition pricing would typically trigger more competitive switching behaviour as insurers pushed aggressively for growth through price comparison websites and direct acquisition channels.

Instead, the market appears to be experiencing something different:

• consumers are shopping less
• switching less
• and showing greater willingness to remain with existing providers.

The market structure has changed

Part of the explanation may lie in how dramatically the insurance landscape has evolved over the last few years.

The market is now operating in a post-GIPP environment, following:

• sustained claims inflation
• FCA pricing intervention
• increased underwriting discipline
• reduced appetite for aggressive acquisition pricing
• and significant M&A and market consolidation activity.

The result is a market with less aggressive competitive tension than existed during the pre-2020 switching era.

Back in 2018 and 2019, insurers regularly prioritised growth through acquisition. High levels of shopping and switching were often fuelled by aggressive pricing differentials between providers.

Today, many insurers are balancing growth ambitions against profitability pressures and retention stability.

That appears to be filtering through into consumer behaviour.

Consumers may no longer see enough value in switching

The data increasingly suggests consumers are questioning whether the effort of switching is worth the potential saving.

In home insurance, consumers are increasingly citing pricing stability as a reason not to shop, with more respondents saying their premium was “about the same as last year” compared to the previous year.

Meanwhile, reasons for staying are becoming less purely price-driven.

In motor insurance, consumers renewing between December 2025 and February 2026 were:

• less likely to switch because a new policy was cheaper (-6 percentage points)
• and more likely to switch for better cover (+5 percentage points).

At the same time, more respondents cited:

• positive claims experiences
• excellent service
• and premium matching by existing insurers
  as reasons for remaining with their current provider.

This suggests consumers may increasingly perceive less differentiation between providers on price alone.

Retention may quietly be winning again

One of the most interesting findings is that longer-tenure customers appear increasingly stable.

In home insurance, customers who had remained with their insurer for five years or more saw shopping rates decline by just -1 percentage point year-on-year, compared to much sharper declines among lower-tenure customers.

Recent quarterly data also showed:

• shopping among customers with 1-2 years tenure fell by -9 points
• while shopping among customers with 3+ years tenure increased slightly.

This may indicate that insurers are becoming more effective at defending existing books — not necessarily through aggressive pricing, but through improved customer retention strategies and more balanced renewal outcomes post-GIPP.

Younger consumers are no longer behaving as expected

Perhaps the clearest sign that traditional switching dynamics are weakening can be seen among younger drivers.

Motor insurance shopping rates for 18-24-year-olds declined by -19 percentage points year-on-year — significantly larger than the reductions seen in older age groups.

Historically, younger drivers have been among the most price-sensitive and acquisition-responsive groups in the market.

The scale of this decline may indicate:

• shopping fatigue
• reduced expectations of meaningful savings
• telematics stabilisation
• or a broader sense that the market is no longer producing dramatically better alternatives.

Claims experience may now matter more than price

Another major behavioural shift is emerging among claimants.

In both motor and home insurance, claimants are now shopping more frequently while simultaneously switching less successfully.

At the same time, claimants are significantly more likely to cite:

• excellent service
• positive claims experiences
• advertising recognition
• and word-of-mouth recommendations
  as drivers of behaviour.

This points toward an increasingly important market dynamic:
claims experience may now be acting as a stronger retention anchor than price alone.

The era of effortless switching may be fading

None of this suggests consumers have stopped caring about price.

But it may suggest that:

• the savings gap between providers has narrowed
• consumers are less convinced switching will materially improve outcomes
• and insurers are operating in a market where retention economics matter more than pure acquisition growth.

That creates a very different competitive environment from the one insurers operated in five or six years ago.

And it may explain why softer pricing alone is no longer enough to reignite switching behaviour.