With the recession meaning that people are making even more effort to cut the cost of their insurance, latest research from Mintel has revealed a new breed of cost-conscious motorist. Exclusive consumer research finds over three quarters (77%) of Brits shopping around before renewing their motor insurance policy. Today, almost half (45%) of motorists get up to three quotes before making a decision. Meanwhile, the number of drivers getting quotes from seven or more providers has more than doubled since 2001, with one in six (16%) consumers doing just this compared to 7% back in 2001. Overall, the number of consumers who have been with their existing provider for 5 years and over has decreased from 31% in 2001 to 23% in 2009, while over two fifths of motorists have been with their existing car insurance provider for less than two years. And it is Britain’s young motorists who are the most insurance savvy, with over a quarter of 17-34 year olds getting seven or more quotes before taking out their policy. As a result, the research shows older drivers tend to be a lot more loyal, whereas young motorists tend to switch their insurance company far more frequently. Over a third of over-55s have held their policy with the same insurance company for over five years. Conversely, two thirds of people aged 17-34 have only had a policy with the same provider for up to two years – this compares with two fifths of people aged 65 plus. Today, half of motorists (49%) purchase their car insurance direct from an insurance company, while around two fifths purchase their policy either from a broker or price comparison site. The use of brokers has declined significantly since 2001 when as many as 37% opted for a broker, whilst the role of aggregators is rising fast. Toby Clark, Head of Financial Services at Mintel said: “Today’s consumers are growing increasingly disloyal and are extremely price sensitive – trends driven in part by the growth of aggregators. The fact that half of people who use price comparison sites switched their car insurance provider within a year of taking the policy out demonstrates just how aggregators encourage this sort of switcher mentality. By comparison, just 15% of people who sourced their cover direct from an insurance company changed their policy after just one year. “ “The problem for the insurance industry is that price comparison sites – whilst helping people to save money – are not conducive to customer retention, instead encouraging regular switching. This makes the task all the more difficult for providers. “He continues. Consumers who arrange their cover direct through an insurance company are more inclined to stay with the same provider for a long time. This highlights the increased profitability of these customers and suggests that policies aimed at aggregator users are perhaps too cheap in light of the distinct lack of renewal prospects. “The growing tendency of particularly younger drivers to purchase insurance through an aggregator suggests that in order to maintain a sustainable business, premiums may indeed need to increase substantially. Or, perhaps a more long term-orientated relationship can be developed between insurers with aggregators” concludes Toby. You might also be interested in: No related posts.