Over a million people with risk insurance policies were thinking of switching providers in the 2017-2018 financial year, new Roy Morgan research reveals. Out of those million, almost 250,000 did change provider, while over 750,000 went ahead and renewed their policy. Many followed the advice of their financial adviser, or family and friends.
Those aged 35-49 were the most likely to switch provider, followed by the 50-64 age group. These two groups make up over 75 per cent of total switching potential. Those in the $60-$99k income bracket make up a key proportion of the segment, with almost 30 per cent with potential to switch. The next income bracket segment of most importance is the $30-$59k group.
The Roy Morgan Single Source survey is based on in-depth face-to-face personal interviews with over 50,000 Australians each year in their own homes. This includes 10,000 interviews with people holding risk and life insurance policies.
Why are people switching life insurance providers?
The main reasons cited in the report include mainly cost. The reasons given specifically for people wanting to switch or to look around include:
- Better price or premium (43 per cent)
- Always shop around (27 per cent)
- Renewal price higher than previous year (9 per cent)
- Recommended by adviser or broker (6 per cent)
- Recommended by family, friend, work colleague (3 per cent)
Norman Morris from Roy Morgan had the following comments on the survey:
'This research has shown that there is obviously considerable potential in this market for insurance companies to either gain or lose customers. This is due to the fact that in the last 12 months, one million risk and life insurance policies, or 10.8% of the market, were either switched to another company or were under consideration to do so.
'Life and risk insurance is likely to be regarded as a grudge purchase and is often included with superannuation or switched as a result of price as we have seen in this release.
'The segment with the greatest number of potential switchers is the 35 to 49 age group with 425,000 or 42.2% of the total. This group is also likely to be coping with young families and other cost pressures including mortgages and as a result may not always be interested in taking out risk and life insurance despite the fact that often they have the greatest need. All personal income groups have shown switching potential, with the largest segment being the 281,000 in the $60k to $99k bracket.