More Australians switching insurance since COVID-19

New data from Roy Morgan shows that since the COVID-19 pandemic began Australians with either vehicle insurance (a market of 30 million+ policies) or household insurance (a market of nearly 25 million policies) have been far more likely to switch their insurance provider, and also far more likely to consider switching after looking for deals from other companies.

Michele Levine, CEO, Roy Morgan, says since COVID-19 up-ended the Australian economy in early 2020 there has been a significant change in how Australians view their vehicle and household insurance policies with far more considering switching providers:

“The latest Roy Morgan data on vehicle and household insurance policies shows that in the year to March 2021 nearly 9.7 million vehicle insurance policies were at risk of being switched to another provider and over 6.9 million household insurance policies were similarly at risk.

“These numbers are a significant increase from a year ago and nearly double the comparable figures in the pre COVID-19 period. In the year to March 2020 only 4.9 million vehicle insurance policies were at risk of being switched and just under 3.7 million household insurance policies.

“Of the nearly 9.7 million vehicle insurance policies at risk of being switched most, 7.2 million policies, were ultimately renewed with the same company. However, this still leaves over 2.4 million vehicle insurance policies that were switched representing 7.9% of the 30 million+ policies in the overall market.

“These trends were replicated in the household insurance market with most of the 6.9 million at risk policies, numbering 5.4 million, eventually renewed with the same company. This does leave over 1.5 million household insurance policies that were switched – a significant increase on a year ago.

“The COVID-19 pandemic which hit Australia early in 2020 caused the country’s first recession in three decades and has clearly led to substantial stress on household financial budgets despite the record amount of Government stimulus spending designed to support the economy.

“The big increases in Australians considering switching their vehicle and household insurance providers shows that in times of uncertainty and potential financial stress people are more likely to be on the lookout for a the best deal they can possible find to insure some of their valuable goods.

“These financial stresses present an opportunity for fast moving insurance companies to tailor their product offerings to those looking for a better deal and potentially sign up a customer who is looking to adjust their insurance policies to better suit their changing financial circumstances.

“The data highlighted here spotlights only a small portion of what is available from Roy Morgan on all types of vehicle and household insurance and can be trended over many years. The information is derived from in-depth personal interviews conducted with over 1,000 Australians per week and over 50,000 per year including details of over 75,000 vehicle insurance policies and over 65,000 household insurance policies.

“To learn more about what drives the decisions of policy holders in the insurance market and how to tap into the business opportunities available for insurers contact Roy Morgan.”

Number of vehicle and household insurance policies at risk of being switched soars since COVID

In the year to March 2021 only 62.9% of the 30 million+ vehicle insurance policies (including Compulsory Third Party (CTP) were renewed without even approaching another company, down from 77.9% in the year to March 2020 – prior to the pandemic. A drop of 15% points in a year dominated by the pandemic.

There was a significant increase in vehicle insurance policies that were renewed only after approaching other companies, up 9.2% points to 23.5%. In addition, vehicle insurance ‘switching’ nearly doubled to 7.9% of all vehicle insurance policies, up 3.6% points from a year ago while 5.8% of vehicle insurance policies were taken out for the first time, up from just 3.5% pre COVID-19.

There was a similar trend in the household insurance market which comprises nearly 25 million policies. A majority of 68.1% of these policies were renewed without approaching another company, down 12.3% points from the year to March 2020 when 80.4% of household insurance policies were thus renewed.

Over a fifth of household insurance policies, 22%, were renewed after approaching other companies, up 7.7% points from a year ago, and 6.1% of household insurance policies were ‘switched’ from another company, up from 3.7% a year ago pre COVID-19. A small proportion of 3.8% of household insurance policies were taken out for the first time, compared to only 1.6% pre COVID-19.

These are some of the latest findings from Roy Morgan’s Single Source insurance data derived from in-depth personal interviews conducted with over 50,000 Australians per annum, including details of over 75,000 vehicle insurance policies and over 65,000 household insurance policies.

Action taken with vehicle and household insurance policies in the last 12 months: 
March 2020 (Pre COVID-19) vs. March 2021 (During COVID-19)

Source: Roy Morgan Single Source (Australia). Base: Australians aged 18+. Vehicle insurance (including CTP – Compulsory Third Party) customers, Apr 2019-Mar 2020, n=34,691, Apr 2020-Mar 2021, n=38,334; Household insurance customers, Apr 2019-Mar 2020, n=26,249, Apr 2020-Mar 2021, n=32,077. “Can’t Say Action” is excluded.

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