Home insurance satisfaction up, but newcomers struggling to retain customers
The home insurance industry has received a huge vote of confidence from Australian consumers according to a new study, with 80.7% of policyholders feeling satisfied with their insurance.
The nationwide study conducted by Roy Morgan Research of over 30,000 household insurance policy holders has revealed a 2.5% increase in satisfaction since 2013 (78.5%), and a 6.4% increase in the ten years from 2006 (74.3%).
Despite the rise in consumer satisfaction a large portion of people remain open to switching providers at renewal time, with price being the biggest determinant in changing policies.
“Satisfaction with household insurance has improved over the last decade, but around a quarter of policyholders are still shopping around at renewal time, although this varies by insurer,” said Industry Communications Director at Roy Morgan Research, Norman Morris.
The vast majority of household insurers saw their level of satisfaction increase since 2013, with 97% of consumers indicating they were fairly likely to renew with their current insurer.
The Royal Automobile Association of South Australia (92.1%) lead the way in customer satisfaction, ahead of APIA (89.3%) and the Royal Automobile Club of Western Australia (87.5%).
Norris noted that customer satisfaction is key in an industry with so much choice between providers.
“To be successful, it is crucial for insurance companies to retain existing customers,” he said.
“In order to increase the likelihood that customers will renew, more attention needs to be given to improving the proportion of ‘very satisfied’ policy holders, who currently account for only 33.7%.”
Of the 18 largest insurers featured in the study, only three declined in levels of customer satisfaction since 2013.
Newcomer Coles saw the largest drop down 2.8%, followed by Westpac (down 2.5%) and QBE (down 1.9%).
Morris also indicated that home insurance newcomers were often able to attract new customers, but found it difficult to retain them.
“It is worth noting that three of the major ‘challenger brands’ ie Youi, Coles and Budget Direct, are all below average when it comes to satisfaction and likelihood of renewing.”
If you’re one of the nearly 25% of Australians ready to renew and thinking of shopping around for a new home insurance deal, why not check out the Mozo home insurance comparison table.
It could be worth your while looking for a quote from other providers, and even asking your current insurer to match a better deal you find. If you need a little help with haggling you can follow our negotiating with your insurance provider script here.