One in 4 car and home insurance policyholders switch each year

We’re all about switching here at bonkers.ie as it’s one of the quickest and easiest ways to put some money back into your pocket, which is more important than ever when inflation is at a near 40-year high!

So a new report from the Central Bank around switching in the insurance sector certainly piqued our interest and is timely if nothing else.  

The research was based on a survey of around 2,500 home insurance policyholders and 3,000 car insurance policyholders that was conducted in Q4 2020.  

So, what does the report tell us?

Well, there are strong levels of switching in the insurance sectors which is great to see, but there are still some barriers.

Some of the main findings of the research are:  

• 8 out of 10 car and home insurance policyholders contact their insurer at renewal. 
• Around 1 in 4 switch insurer. This figure is similar to previous research conducted by the CCPC and above reported switching levels in the EU (16%) but below those in the UK (35%). 
• Perhaps unsurprisingly, policyholders are more likely to contact their insurer or switch if their premium has gone up at renewal. 
• Policyholders who follow media coverage of developments in the insurance sector are also more likely to contact their insurer at renewal and/or switch.
• Perceptions around loyalty play a big part in whether consumers look to switch. Around 1 in 4 consumers believe that loyalty to an existing provider will be rewarded. And these consumers are significantly less likely to switch.
• Time-poor consumers are also less likely to switch insurer.
• The vast majority of policyholders agree that there are big savings to be made by shopping around, which is good to hear as it’s something we definitely agree with at bonkers.ie!  

Consumer perceptions regarding engagement and switching

“Digital discomfort” and barriers to switching 

When it comes to switching, around 55% of consumers use online information and online channels as part of their engagement and switching process. However, around 1 in 5 policyholders said they have difficulty in using the internet to search for and purchase financial products, including insurance. These consumers tend to be older, lower income, and less educated according to the Central Bank. 

For example, those over 60 are 14% to 20% more likely to report difficulty than those under 45. Those in the higher income categories are 5% to 13% less likely relative to their counterparts in the lowest income category to report 'digital discomfort'. And policyholders with a third-level education are approximately 5% less likely to report digital discomfort than those without.

People who report digital discomfort are more likely to stick with the status quo and not switch. According to the Central Bank, this highlights the importance of introducing digital literacy initiatives to protect against the risk of digital exclusion and to ensure all consumers can easily access the tools and information they need to seek out the best value in the insurance sector. 

End of 'price walking' 

Earlier in the year, the Central Bank's ban on so-called ‘price walking’ came into effect in the insurance sector. 

Price walking is a pricing strategy whereby loyal customers who stay with the same insurer for many years gradually end up getting charged higher and higher prices at each renewal compared to newer or more price-savvy customers. In other words, their loyalty is penalised and they end up paying a so-called 'loyalty premium'.

Insurance companies were able to use detailed analytics and algorithms to target those customers it knows are more likely to pay the higher prices.

However, this is now illegal.

This means everyone with the same risk profile must now be charged the same price for their car or home insurance. 

However first-year introductory discounts and offers are still allowed! So it’s never been more important to shop around for the best value each year, which you can do on bonkers.ie! 

Get the best value car and home insurance on bonkers.ie

If you’re looking for cheaper car and home insurance cover, look no further.

Because of the ban on price walking, you can no longer haggle with your existing insurer. So you have to switch to get the best deals.

Here at bonkers.ie our new car insurance service and home insurance service will provide you with a discounted quote in just a few clicks. So see what you could save with us today!

Our website is simple and easy to use and we have a team of Dublin-based customer service agents to help you if you need to chat. 

We can also help you save on other forms of insurance, as well as your energy, broadband, and banking costs.

Take a look at more insurance articles

If you want to learn more about car and home insurance or if you're looking to take out cover, check out the following:

• We recently wrote about why car and home insurance prices have increased.
• Here's a look at nine things to consider when taking out home insurance. 
• If you're interested in taking out a home insurance policy, take a look at our home insurance Quickstart Guide.

You can read more car and home insurance-related articles on our blog and guide pages.