Roy Morgan CEO Michele Levine highlights that the mounting inflation rates and rising interest rates have contributed to the surge in policies deemed "at risk" of being switched. The high cost of living has prompted Australians to seek better deals in an attempt to alleviate their financial strains. Out of the 8.2 million policies in question, approximately 6.4 million were ultimately renewed with the same company, while more than 1.8 million households decided to switch providers.
"These figures clearly indicate a significant increase in the number of policies at risk of being switched, driven by the pandemic and the subsequent rise in the cost of living. Australians are actively seeking ways to manage their expenses and find adequate insurance coverage," explains Ms. Levine.
While 66.1% of policies were renewed without approaching another company in the year to June, this figure represents a slight decrease from the previous year (66.5%) and the year to June 2021 (67.2%). Among the top four brands with the highest proportion of automatic policy renewals – RAC, RACV, CGU, and APIA – more than 70% of their policyholders renew their household policies automatically.
On the other hand, Woolworths, Budget Direct, Youi, and AAMI have automatic renewal rates below 60%. Instead, these brands witness 23.2% of their household insurance policies being renewed after customers consider other companies.
Moreover, the data reveals that 4.3% of household insurance policies were taken out for the first time, marking a 0.4 percentage point increase from two years ago. It is important to note that these figures exclude the "can't say action," which applies to approximately 1.3 million policies out of the total of 28.8 million policies reported over the 12-month period.
"The financial pressures faced by millions of Australians present an opportunity for flexible and innovative insurance companies to tailor their offerings to those seeking a better deal. It's a chance to attract customers who are looking to adjust their insurance policies to better suit their changing financial circumstances," notes Ms. Levine.
Roy Morgan is a trusted source of information, gathering insights from in-depth personal interviews conducted with over 60,000 Australians annually.
Published: Monday 9th October, 2023
Please Note: If this information affects you or is relevant to your circumstances, seek advice from a licensed professional.
