‘Considerable potential’ for policy switching

The research found that 10.8 per cent of policy holders had the potential to switch to a new policy provider in the year to June 2018, based off the number of people who did switch and the number who renewed with the same policy provider after approaching others.

According to Roy Morgan industry communications director Norman Morris, this figure indicates a large capacity for clients to switch providers.

“This research has shown that there is obviously considerable potential in this market for insurance companies to either gain or lose customers,” he said.

“This is due to the fact that in the last 12 months, 1 million risk and life insurance policies, or 10.8 per cent of the market, were either switched to another company or were under consideration to do so.”

Mr Morris noted that the largest number of policy holders with the potential to switch were between the ages of 35 and 49, accounting for 42.2 per cent of the potential switcher cohort.

“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,” he added.

“All personal income groups have shown switching potential, with the largest segment being the 281,000 in the $60,000 to $99,000 bracket.”